As the North American session begins, the EUR is the strongest of the major currencies while the CHF is the weakest. The US session begins with the 3-day weekend ahead in both the US and the UK (TGIF for all). The changes are reflective in "holiday like" trading with the major indices relatively scrunched together.
Having said that both the EURUSD and the GBPUSD have been trending higher in the morning European session. The rise in the GBPUSD comes despite a much weaker than expected retail sales. If the CPI data earlier this week was a disappointment in the UK (too high), the retail sales data helped to soften the blow from that stronger inflation data (assuming retail sales softness will help to keep inflation down going forward).
Technically, in the GBPUSD the gains were helped technically (and may be the key reason for the bounce) by the holding of the 200-hour MA on the dip after the retail sales report. Looking at the hourly chart below, the green line (200 hour MA line) on the chart stalled the fall, and sellers turned to buyers. The price then squeezed higher and currently trades back above the 100-hour MA (blue line) at 1.27123. Can the price now stay above that level? That will be a close barometer for both buyers and sellers in early trading today. Buyers looking for more upside, want to see that MA now hold support.
For the EURUSD, it to fell early below the 100-day MA, but stalled at the 100 bar MA on the 4-hour chart (see chart below)and sellers turned to buyers pushing the price back higher.
The ECB chatter this morning reiterated from both Nagel and Schnable the June rate cut theme:
Despite the central bank divergence (US on hold and the ECB set to cut) and the rotation lower in the EURUSD this week, the correction lower in the EURUSD has the price still above the 100-day MA and that 100-bar MA on the 4-hour chart. For the year, the EURUSD is lower after closing the year at 1.1036, but well off the low at 1.0600 (the price at 1.0836 is near the middle of the range).
In Japan, the CPI data came in as expected at 2.2% which was as expected, but lower than the 2.6% last month.
US stocks are marginally higher after declines yesterday despite Nvidia's rise (interest rate > Nvidia's earning). Today, yields are modestly higher after moving higher by about 5-6 basis points. Ethereum prices are lower versus this time yesterday despite more indications that an ETF will be approved soon.
US preliminary durable goods for April will be released with expectations of -0.8% versus 0.9% last month. Canada retail sales are expected at unchanged versus -0.1% last month. University of Michigan sentiment (final) index will be released at 10 AM with expectations of 67.5 versus 67.4 preliminary. 1-year inflation expectations came in at 3.5% in the preliminary report up from 3.2%. Five-year inflation expectations rose to 3.1% from 3.0%.
A snapshot of the other markets as the North American session begins shows
- Crude oil is trading down $0.28 at $76.58. At this time yesterday, the price was at $78.15
- Gold is trading up $10.03 or 0.44% at $2338.88. At this time yesterday, the price was higher at $2367.15
- Silver is trading up $0.36 or 1.21% at $30.48. At this time yesterday, the price was at $30.56
- Bitcoin currently trades at $67,355. At this time yesterday, the price was trading at $69,944
- Ethereum is trading at $3716. At this time yesterday, the price trading at $3900
In the premarket, the snapshot of the major indices are modestly higher. Yesterday the Dow Industrial Average had its worst trading day since March 2023 (-1.53%). The NASDAQ index was up as high as 194.84 points yesterday before reversing lowering and closing down -65.51 points.
- Dow Industrial Average futures are implying a gain of 43.96 points. Yesterday, the index fell -605.78 points or -10.53% at 39065.27. For the week the index is down -2.35%. Closing lower would snap a five-week up Strain.
- S&P futures are implying a gain of 34.74 points or 0.65%. Yesterday, the index fell -39.17 points or -0.74% at 5267.85. For the week the index is down -0.67% which would snap a four-week run to the upside.
- Nasdaq futures are implying a gain of 207 points 1.07%. Yesterday, the index fell -65.51 points or -0.39% at 16736.03. For the week the index is still up 0.30%. A close higher would be the fifth week in a row.
European stock indices are trading mostly higher today in the morning snapshot:
- German DAX, -0.37%. For the trading week, the index is down -0.44%.
- France CAC , -0.24%. For the trading week the index is down -1.02%.
- UK FTSE 100, -0.36%. For the week the index is down -1.30%.
- Spain's Ibex, -0.90%. For the week the index is down -1.03%.
- Italy's FTSE MIB, +0.32% (delayed 10 minutes). For the week the index is down -2.88%
Shares in the Asian Pacific markets were mostly lower across the board:
- Japan's Nikkei 225, -1.17%. For the week the index fell -0.36%.
- China's Shanghai Composite Index, -0.88%. For the week the index fell -2.06%
- Hong Kong's Hang Seng index, -1.3%. For the week the index fell -4.83% for its worst week since January 15.
- Australia S&P/ASX index, -1.08%. For the week the index fell -1.1%
Looking at the US debt market, yields are higher:
- 2-year yield 4.943% +1.1 basis points. At this time yesterday, the yield was at 4.873%
- 5-year yield 4.542%, +1.6 basis points. At this time yesterday, the yield was at 4.462%
- 10-year yield 4.488%, +1.2 basis points. At this time yesterday, the yield was at 4.421%
- 30-year yield 4.589%, +0.9 basis points at this time yesterday, the yield was at 4.543%
Looking at the treasury yield curve spreads they are fairly moved more negative:
- The 2-10 year spread is at -45.5 basis points. At this time yesterday, the spread was at -45.1 basis points.
- The 2-30 year spread is at -35.5 basis points. At this time yesterday, the spread was at -33.0 basis points.
In the European debt market yields in the benchmark 10 year yields are mostly lower: