- Germany December preliminary CPI +8.6% vs +9.1% y/y expected
- Canada December S&P Global manufacturing PMI 49.2 vs 46.9 prior
- US December S&P Global manufacturing PMI 46.2 vs 46.2 prelim
- US November construction spending +0.2% vs -0.4% expected
- New Zealand GDT price index -2.8%
- Sam Bankman-Fried pleads not guilty to all charges in New York court
- Atlanta Fed GDPNow Q4 GDP tracker +3.9% vs +3.7%
- US House Republicans get off to a bad start to 2023
Markets:
- Gold up $13 to $1837
- US 10-year yields down 3.9 bps to 3.88%
- WTI crude down $3.11 to $77.16
- S&P 500 down 0.4%
- USD leads, CHF lags
The early mood in markets was positive but it soured shortly after the equity open. Eyes were on Tesla after poor Q4 deliveries and that led to a punishing 12% decline in shares of the automaker. Apple added to the woes, falling 4% to the lowest since June.
When the mood was better, cable staged an impressive comeback from 1.1901 back to unchanged at 1.2060 however as the mood worsened, GBP/USD fell back to 1.1976. Trading followed a similar arc in NZD/USD and AUD/USD as they attempted to rebound in early US trading only to sag again, though not back to session lows.
The loonie, however, did fall back to fresh lows as oil fell more than $3. The market is expressing some worry about the current China slowdown and overall global growth.
That said, it's tough to take away too much from the first real session of the year. Flows are dominant and economic news in US trading was light. German inflation data undershot today and that should be some comfort but it was only evident in European stocks.
The flows should settle down later this week and we will be carefully watching tomorrow's calendar, which includes ISM manufacturing.
