As the North American session begins, the US indices in pre-market are modestly higher led by the Nasdaq.
- Dow up 7 pioint
- S&P up 8.59 points
- Nasdaq up 43 points
Yesterday, the indices all fell.
US yields are higher for the 3rd day in a row:
- 2 year 4.169%, up 2.1 bps
- 5 year 4.119%, up 2.3 bps
- 10 year 4.247%, up 2.7 bps
- 30 year 4.439%, up 3.2 bps
The US treasury will auction 10-year notes at 1 PM ET after a 3 year auction yesterday which I gave a grade of C as most of the components were near the averages over the last 6 months. .
In the commodity markets:
- Crude oil is up $0.94 or 1.37% at $69.53. Topside resistance is near the $70 level (near a downward-sloping trend line). The 200-hour MA stalled the corrective fall near $68.58
- Gold is trading modestly higher by $2 or 0.07% at $2695.53
- Bitcoin is trading up $1874 at $98521.
All of that comes ahead of the key US CPI data which will be released at 8:30 AM ET today. The report is expected to show that the headline annual number rose to 2.7%. That is higher than the 2.6% the prior month. The monthly rise is expected at 0.3%. The core inflation number that excludes food and energy, is expected to come in at 3.3%, unchanged from October, and also up 0.3% on a monthly basis.
Markets are feeling that those types of numbers would not dissuade the Fed from easing policy at the December meeting next week (Wednesday, Dec 18). The Fed has already cut rates by 75 basis points since September-18 meeting.
The market has priced in a 86% chance for a 25 basis point cut next week.
Later today, the BOC will announce its latest interest rate decision with the central bank expecting to cut rates by 50 basis points to 3.25% vs 3.75% currently. The USDCAD is trading near highs going back to 2020. It would take a series of breaks below 1.4145 down to 1.4088 to increase the bearish bias. Absent that, and the buyers you can argue, are still more in control.
In the forex market, the US dollar is higher vs all the major currencies today with the biggest gains vs the JPY, NZD and AUD.
In the video below, I discuss the technicals on the 3 major currency pairs - the EURUSD, USDJPY and GBPUSD.
EURUSD: THe EURUSD is trading below a cluster of MA ahead of the US CPI. Stay below is more bearish. Moving above would shift the bias back to the upside.
USDJPY: The USDJPY moved above the 200 day MA and the 100 bar MA on the 4-hour chart at 152.02. Resistance at the 50% and the 200 bar MA on the 4-hour chart between 152.69 to 152.79.
GBPUSD: The GBPUSD found resistance sellers near the 200 bar MA on the 4-hour chart and the 50% midpoints near 1.2779. SUpport is near a swing area between 1.2712 and 1.2722. In between is the 100 hour MA at 1.2752. Those levels will be used by traders to provide the risk defining levels and also the roadmap for more upside (on a break higher above the 200 bar MA and the 4-hour chart), or more downside (on a break below the lower swing area).
