- US stocks close higher for the 4th consecutive day in a up and down and back up day.
- What is on the economic/event calendar for tomorrow's US trading session?
- BOC Macklem: Higher rates would be needed to bring inflation back to 2% target
- WTI crude oil futures settle at $88.26
- Fed's Daly: Supports initial benchmark rate hike at the March meeting
- BOE to increase official bank rate by 25 basis points to 0.5% tomorrow
- Unchanged to higher results for major European indices today
- Crude oil inventories for the current week draw of -1.046M versus estimate build of 1.525M
- IMF Chief Georgieva: Geopolitical tensions make uncertain outlook for global economy
- US orders 3000 troops to Poland, Germany, Romania as tension increases in Russia/Ukraine
- Eurogroup head Paschal Donohoe: Upswing inflation is affecting growth
- US treasury announces quarterly refunding of $110B
- Canada Building Permits for December -1.9% vs -1.6% estimate
- ADP nonfarm payroll estimate -301K versus +200 K estimate
- OPEC+ agrees to increase March oil production at 400,000 BPD
- ForexLive European FX news wrap: Eurozone inflation hits record, dollar slump extends
- The EUR is the strongest and the USD is the weakest as North American session begins
- US MBA mortgage applications w.e. 28 January +12.0% vs -7.1% prior
The USD was the weakest of the major currencies for the third consecutive day coming into the US session, but gave up that distinction at the close in favor of the NZD.
This modest change came despite a rare decline in the ADP nonfarm payroll estimate of -301K v +200 K est. The prior month was revised lower but was still well above the BLS number from last month (ADP was at 767K vs 199K from the BLS NFP report in December).
Fed officials have chatting up the possibility of the week nonfarm payroll report on Friday due to omicron. The ADP data seems to suggest that trend. The NFP is expected to show a gain of about 145,000 jobs on Friday.
The USD decline was led by falls vs the EUR (-0.33%) and the GBP (-0.39%). Both those currencies were the strongest of the major currencies today (see ranking below).
The BOE is expected to raise rates by 25 basis points tomorrow at 7 AM ET (2nd straight rise in rates expected. In December they raised rates by 0.15%). The ECB will likely keep rates unchanged despite the highest CPI rate in 30 years at 5.4% was released today. The ECB decision will be announced at 7:45 AM ET, with the press conference set for 8:30 AM ET where the ECB President will likely be grilled on 'when are you going to tighten' questions.
The EURUSD is trading right around the 50% midpoint of the 2022 trading range at 1.13014. That level will be a barometer for the buyer and sellers in the new day with the 200 hour MA below at 1.12487 as the next key support target ad 1.1344 (61.8%) as the next upside target.
The GBPUSD moved back above its 100 day MA at 1.35097 and is trading at 1.35734 into the close for the day. Getting above 1.3600 would increase the bullish bias for the GBPUSD in the new trading day.
The US stocks closed higher for the 4th consecutive day today (although the Russell 2000 did close lower). The S&P index led with a 0.94% gain. The Dow was up 0.63% and the Nasdaq was up 0.50%. However, the string may be over after Meta reported weaker revenue guidance. Shares are down $71 or -22% in after hours trading. Ouch.
IN other markets at the end of the day, the snapshot is showing:
- Spot gold is trading up $6.55 or 0.37% at $1807
- Spot silver is up three cents or 0.14% at $22.65
- WTI crude oil is trading down $0.21 at $87.97
- Bitcoin is trading down on the day at $36,950. At this time yesterday the price was trading at $38,779.97.
IN the US debt market, the yields are ending lower which also helped to weaken the USD a bit today.
In Europe, the benchmark 10 year yields ended the day mixed, but little changed on the day. The German 10 year yield remains above 0.0% at 0.037% going into the ECB decision tomorrow. If the ECB does tilt more to a tightening bias (something Lagarde has never dealt with), there is room to roam as European yields are still well be comparable yields in the US.
