The GBP is the strongest and the NZD is the weakest as the North American session.
The data from New Zealand presented a mixed picture, with some results better than expected and others worse, but overall sentiment negative to the NZD. The BusinessNZ Manufacturing Index came in at 49.1, which was higher than the previous 48.1 reading, indicating an improvement in the manufacturing sector, but still below the 50 level indicative of contraction in the manufacturing sector. Visitor Arrivals m/m showed a decrease of -2.9%, compared to an increase of 0.6% in the prior month. Finally, Inflation Expectations q/q declined to 2.79% from the previous 3.30%. The lower inflation data (and other data) has contributed to the NZD's fall today, as it eases pressure on the central bank to raise interest rates and thereby reduces the currency's attractiveness.
In the UK, economic data released showed mixed but more positive results which contributed to it's gains. While the GDP month-over-month (m/m) for March was -0.3%, missing expectations of 0.0%, the preliminary 1Q GDP quarter-over-quarter (q/q) met expectations at 0.1%, indicating slight economic growth. Notably, construction output in March exceeded expectations at 0.2%, compared to the expected decline of -0.4%. The goods trade balance for March was better than expected at -16.4B, as opposed to the anticipated -17.5B. Industrial production and manufacturing production in March also surpassed expectations, with both showing a growth of 0.7%, compared to the expected 0.1% and 0.0% respectively. Finally, preliminary business investment for the first quarter showed a significant positive surprise at 0.7% growth, compared to an expected -0.7%.
Today's economic calendar in the US will be led by the Import Prices m/m report at 8:30 AM ET, with a positive change of 0.3% expected compared to the previous month's decrease of 0.6%. Later, at 10:00 AM ET, the Preliminary University of Michigan Consumer Sentiment index will be announced, with a forecast of 63.0, slightly below the previous reading of 63.5. The Preliminary University of Michigan Inflation Expectations report will also be published, with the previous 1 year forecast a focus. Last month it came in at 4.6%. The 5 year expectation was reported at 2.9% last month. Finally, at 7:45pm long after we are gone, FOMC Member Jefferson and Bullard are scheduled to speak together, which could provide insights into the Federal Reserve's current monetary policy stance and future plans.
U.S. stock futures are pointing higher as investors speculate on whether the Federal Reserve will pause its policy tightening campaign (it will continue to go back and forth). The Dow is higher for the 2nd Friday in a row. The problem is Monday through Thursday which for the 2nd consecutive week, has shown declines on each day for the Dow30. The S&P and Nasdaq are both higher in premarket. The Nasdaq is up 0.76% this week. The Dow is down -1.08%.
Debt ceiling negotiations were postponed, with a meeting between U.S. President Joe Biden and other key figures now scheduled for early next week. The two sides felt that it was better to let staffers hash through more thoughts before meeting.
US yields are modestly higher as the clock ticks to the end of the week. The US 10 year yield this week is down marginally (-1.8 bps). The 2 year yield this week is unchanged.
A snapshot of the markets are showing:
- Gold is down -$10 or -0.50% at 2004.80.
- Silver is down -$0.37 or -1.57% at $23.79
- WTI crude oil is up $0.28 at $71.15
- Bitcoin is below the $27,000 level at $26,349. At 5 yesterday was trading at $27,017
In the premarket for US stocks, the futures are implying a higher open:
- Dow Industrial Average 118 points after yesterday's -221.82 point decline
- S&P index is up 12.13 points after yesterday's -7.0 point decline
- NASDAQ index is up 17.5 points after yesterday's 22.06 point rise
in the European equity markets, the major indices are higher heading into the end of the trading week:
- German Dax +0.40%
- Frances CAC +0.53%
- UK's FTSE 100 +0.15%
- Spain Ibex +0.90%
- Italy's FTSE MIB +0.92%
in the Asia-Pacific session:
- Japan's Nikkei 225 rose 0.90%
- Shanghai composite Index fell -1.12%
- Hang Seng index fell -0.59%
- Australia's S&P/ASX was marginally higher by 0.07%
In the US debt market yields are marginally higher:
- 2 year yield 3.916% +1.0 basis points
- 5 year yield 3.379% +2.2 basis points
- 10 year yield 3.415% +1.9 basis points
- 30 year yield 3.763% +2.0 basis points
In the European debt market, the benchmark 10 year yields are higher
