The USD is mixed but losing ground vs the AUD and NZD
The NZD and the AUD are leading the way to the upside as they benefit from risk-on flows. In addition, the RBNZ is exploring adding house prices to its mandate. The thought is if done it would lead to the RBNZ having more of an upward tilt to it's monetary policy. RBA's Debelle said that the AUD has come down by a noticeable amount but he did not expect to change rates for 3 years. Of course, the GSA will release funds for the transition of power. Both the AUD and the NZD are off highs however. The CHF is the weakest of the majors. It still had a up and down day. The JPY is also weaker on risk-on flows. The USD is mixed with a negative tilt thanks to declines vs mostly the AUD and NZD. The greenback is also lower vs the EUR (-0.20%) in the morning snapshot. Gold is down sharply for the 2nd consecutive day, while bitcoin has moved sharply higher and trades back above the $19,000 level.
The ranges and changes are showing the USD is near unchanged vs the GBP, JPY, CHF. The NZDUSD has the largest trading ranges followed closely by the AUDUSD (at 87 and 84 pips respectively). The USDJPY - like the USDCHF - had a down an up day after the sharp rise yesterday. The range at 50 pips is still modest but at this time yesterday, we were looking at a range of 20 pips before the sharp turn to the upside (the range ended at 95 pips yesterday).
In other markets, the snapshot is showing:
- Spot gold is down sharply for the 2nd consecutive day. It is currently down around $29.50 of -1.61% at $1808.25.
- Spot silver is also lower. It has fallen $0.59 or 2.48% to $23 even.
- WTI crude oil futures are going the other way. The January contract is up $0.61 or 1.4% at $43.67
In the premarket for US equities, the futures are implying a higher opening with the Dow industrial average leading the way once again. The NASDAQ index is lagging
- S&P index up 29.91 points
- Dow industrial average up 318 points
- NASDAQ index up 43 points
In the European equity market, the major indices are also moving higher as flows head into the more beaten-down indices around the globe:
- German DAX, +1%
- France's CAC, +1.4
- UK's FTSE 100, +1.2%
- Spain's Ibex, +1.1%
- Italy's FTSE MIB, +1.8%
In the US debt market, the yields are modestly higher with a modestly steeper yield curve. The 2 – 10 year spread is up to 70.66 basis points from 69.43 basis points at the close yesterday:
In the European debt market the benchmark 10 year yields are near unchanged levels with Germany France UK and Portugal up modestly while Spain and Italy are down modestly:
