As the North American session begins, the CAD is the strongest and the JPY is the weakest of the major currencies. The USD is modestly weaker ahead of chair Powell's reconfirmation testimony in front of the Senate Banking Committee. Fed's Mester and George will also be speaking. The market will be interested in hearing about balance sheet reductions. Do they favor a slow runoff or more aggressive quantitative tightening?
The U.S. Treasury will auction off three year notes at 1 PM. They will auction off 10 and 30 year issues on Wednesday and Thursday. The US CPI will also be released on Wednesday, with PPI on Thursday. US retail sales will be released on Friday along with earnings from J.P. Morgan, Citigroup, BlackRock and Wells Fargo to kick off the earnings season.
US stocks are higher after erasing most of the losses in the Dow Jones and S&P by the close The NASDAQ index closed higher after trading down by over 400 points intraday (up 6.93 points).
US yields are mixed in early trading with the 10 year down to 1.76% (down about two basis points). The two year yield is up 2.5 basis points however. The market is started to price and four tightenings in 2022 with the first occurring in March.
A snapshot look around the markets currently shows:
- Spot gold is trading up $7.13 or 0.40% at $1807.63
- Spot silver is up $0.18 or 0.87% at $22.64
- WTI crude oil futures are trading up $1.20 at $79.44
- The price of bitcoin is trading steady at $41,847.39
Looking at the premarket for US stocks, the futures are implying higher levels for the major indices:
- Dow Jones is up 31 points after declining by 162.79 points yesterday
- S&P index is up nine points
- NASDAQ index is up 42 points
In the European equity markets, the major indices are also rebounding in trading today:
- German DAX, +1.1%
- France's CAC, +1.1%
- UK's FTSE 100, +0.65%
- Spain's Ibex, +0.8%
- Italy's FTSE MIB +0.9%
In the US debt market, the rates are mixed with the short and higher in the longer end lower (flatter yield curve). The 2 -year moved to the highest since February 2020:
In the European debt market, the yields are mostly lower with the exception of Italy:
