The strongest to weakest currencies

As the North American session begins, the JPY is the strongest of the majors, while the AUD is the weakest. The USD is mixed as the markets await retail sales at the bottom of the hour.

Retail sales are expected to be unchanged. The core retail sales are expected to average and by 0.2%. This will represent the fifth straight increase. Also on the calendar today or import prices, industrial production, capacity utilization, US leading indicators, University of Michigan limitary consumer sentiment and business inventories.

Fed members Harker, Williams are expected to speak. The Fed will enter their quiet period over the weekend ahead of the interest rate decision on January 26. Fed members have tilted more toward the hawkish side with rate hikes now moving toward four in 2022 versus three.

US stocks were higher in premarket trading earlier but have now turned negative. Bank earnings have come out and although earnings are stronger, the stocks are down.

Citigroup is currently trading down -3% and J.P. Morgan shares are trading down -4.12%. Bank of America is trading down -1.31%. Wells Fargo is bucking the trend with a gain of 1.79%. It is not a good start to the earnings season.

JP Morgan did say they took $1.8 billion net benefit due to releasing of loan losses that never materialized. Absent that the earnings-per-share and revenues would have been weaker than expectations.

European energy prices moved back higher as US and Russia talks broke down over Ukraine. European gas futures rose as much as 13% while storage levels have fallen below 50%. Yields are higher in Europe and stocks are lower.

Oil prices in the US have moved back higher in trading today.

In other markets, the morning snapshot shows:

  • Spot gold is trading down 96 seven cents or -0.05% at $1821.10
  • Spot silver is down $0.12 or -0.52% at $22.95
  • WTI crude oil is trading up $0.28 and $82.41
  • Bitcoin is trading down marginally $42,242. It was trading at $42,800 the the 5 PM New York close yesterday

In the premarket for US stocks, the major indices are trading lower after yesterday's sharp declines. Yesterday the selloff saw the NASDAQ index lead the way with a -2.51% decline:

  • Dow industrial average -117 points after yesterday's -176.7 point decline
  • S&P index -18.68 points after yesterday's -67.34 point decline
  • NASDAQ index -109 points after yesterday's -381.58 point decline. The NASDAQ index if it opened at this level would be below its 200 day moving average for the second time this week

In the European equity markets, major indices are trading lower as well

  • German DAX, -1%
  • France's CAC -1%
  • UK's FTSE 100 -0.3%
  • Spain's Ibex -0.5%
  • Italy's FTSE MIB -1.2%

In the US debt market, the yields are higher as inflation fears return to the market sentiment. The tenure yield is up three point basis points.

The US yields are higher in early US trading

European benchmark 10 year yields are also trading higher.

The benchmark 10 year yields in Europe are higher