- ISM manufacturing PMI for December 48.4 vs. 48.5 estimate
- FOMC minutes: Most participants emphasized 'flexibility and optionality' on rates
- JOLTS job openings 10.458M vs 10.000M estimate
- Feds Kashkari:Appropriate to continue interest rate hikes at least atthe next few meetings
- Redbook sales rise 10.2% w/e YOY
- McCarthy loses another vote
Markets:
- Gold up $16 to $1855
- WTI crude oil down $3.77 to $73.16
- US 10-year yields down 11 bps to 3.68%
- S&P 500 up 29 points to 3875
- AUD leads, USD lags
Yesterday's US dollar surge turned into today's USD slump. Much of the move came in Europe and Asia with many pairs trading sideways in North America, particularly EUR/USD and GBP/USD while AUD and NZD gave some of the super-strong (+2%) gains back in New York.
The ISM manufacturing data hit and initially the market reaction was minimal to a headline that was close to estimates but the market increasingly began to focus on a strong employment number and that led to worries about a tighter economy and Fed, causing a wobble in risk appetite and a fresh bid in the US dollar -- particularly USD/JPY.
Similarly, the FOMC minutes didn't offer up any of the dovish nuggets that bulls were hoping for and the dollar was briefly bid again. US equities also gave up their gains for a time before a late surge.
One of the most-curious moves was in the Canadian dollar, which was just below the Aussie as the best performer on the day. It more than wiped out yesterday's fall and remained strong into the close. That was despite a non-stop day of selling in the oil market. It's a real headscratcher and you have to wonder if there were some hidden flows beyond it.
We get into some top tier data on Friday and I think that's when the real start-of-year trading begins, though if you like volatility this is certainly the market for you.
