- US May Empire Fed manufacturing index -31.8 vs -3.75 expected
- McCarthy: White House isn't talking anything serious on debt ceiling
- NY Fed: Credit card and auto loan deliquency rates rose on Q1
- Canada April housing starts 262K vs 220K expected
- Canadian April home sales +11.3% vs +1.4% prior
- Fed's Kashkari: Inflation is much too high but starting to come down
- Fed's Barkin: I'm not yet convinced inflation is on a steady path downward
- Fed's Bostic: If I was voting now, I would vote to hold rates in June
- Fed's Bostic: Appropriate policy is to wait and see the effects of tightening
- More from Bostic: I'm personally inclined to pause but FOMC still considering what to do
- BOEs Pill: BOE raise rates last week because too much momentum in the economy
- Mexican peso hits the best level since before the Trump era
- Paul Tudor Jones: Equity prices will go up this year
- Fed's Goolsbee: There is still a lot of impact from prior hikes that's still to come
- Canada wholesale trade for March -0.1% versus -0.4% expected
- Australia maintains AAA-rating from Fitch
Markets:
- Gold up $4 to $2015
- US 10-year yields up 4 bps to 3.50%
- WTI crude oil up $1.30 to $71.34
- S&P 500 up 0.3%
- AUD leads, JPY lags
Despite a poor Empire Fed survey and negative headlines from McCarthy on the debt ceiling, the market mood was positive on Monday as yields rose, stocks made some headway and the dollar lagged. The debt ceiling briefly derailed stocks but regional banks were solid and that put a floor under the market.
Later in the day, commodity currencies all made moves higher as the Asian ranges broke. Some of that was assisted by oil and commodity prices but the moves in FX were outsized and could prove fleeting if the upcoming China data today is soft.
The euro and yen mostly traded sideways in North American trade without any particular drama. In contrast, the pound made some headway and a return above 1.2500 but not above Friday's high of 1.2540.
Overall, it was a cautiously optimistic start to the week and Fed comments underscored that a conditional pause is the playbook for the months ahead.
