As the North American session begins, the GBP is the strongest while the CAD is the weakest. The changes are modest across the currency spectrum. Relatively speaking, the strongest weakest are scrunched together. Markets are trying to find their way as central banks all move toward a more tighter policy to control inflation.
The CAD is weaker on the back of lower oil prices. Crude oil futures are back below the $90 level after moving as high as $93.17 last week. Recall also that the Canadian jobs report released last Friday was weaker than expectations (mostly as a result of omicron).
IN the UK, the Bank of England did raise rates by 25 basis points last Thursday. They have now tightened that two consecutive meetings and some of the monetary policy committee wanted a 50 basis point move to slow inflation. Despite the rise, the last two days have seen a decline in the currency. The GBPUSD yesterday tested its 200 hour moving average and found support buyers. The pair is back up testing its higher 100 hour moving average at 1.3553 in trading today. Move above - and stay above - and that would be more bullish for the pair/currency.
The USD is mixed with the strongest gains verse the CAD(+0.27%). The greenback is weakest verse the GBP but only by -0.08%. The U.S. Treasury will auction off $50 billion of three year notes at 1 PM ET. Yields since the last auction have risen dramatically and trades at the highest level since January 2020 (before the start of the pandemic). The auctions will be a key indicator of investor demand across the full maturity spectrum.
The US trade balance will be released at 8:30 AM ET. It typically is not a big market mover.
Crude oil prices are lower and back below the $90 level as traders react positively to the meeting between France's Macron and Russian Pres. Putin.
US stocks are mixed in premarket trading with the NASDAQ down the most. Yesterday, the S&P and NASDAQ index fell with the NASDAQ declining -0.58% as the weakest of the majors. The Dow industrial average eked out a fractional gain. The S&P was in between the two. The Russell 2000 also rose marginally yesterday. That same combination is in play today.
A snapshot of other markets as US traders enter for the day shows:
- Spot gold is trading down $2.01 or -0.11% at $1818.09
- Spot silver is down $0.16 or -0.70% at $22.83
- Natural gas is up two cents or 0.43% at $4.25
- Crude oil is trading down 100 and $0.84 at $89.48
- Bitcoin is trading at $43,475. The high price today extended all the way to $45,501. That was the highest level since January 5. And is up from the January 24 low of $32,950.
The premarket for US stocks, the major indices are mixed/little changed:
- Dow industrial average is up 14 points after yesterday's 1.39 point gain
- S&P index is down 5.4 points after yesterday's -16.66 point decline
- NASDAQ index is down 40 points after yesterday's -82.34 point decline
In the European equity markets, the major indices are mixed:
- German DAX, -0.2%
- France's CAC, unchanged
- UK's FTSE 100 unchanged
- Spain's Ibex +0.9%
- Italy's FTSE MIB unchanged
In the US debt market, the yields are higher ahead of the $50 billion 3- year note auction. That auction will take place at 1 PM ET, and is the first of three including the 10 year note auction tomorrow ($37 billion) and the 30 year bond auction ($23 billion) on Wednesday.
