The JPY is the strongest and the AUD is the weakest as North American traders enter for the day. The USD is higher today after the FOMC meeting minutes showed that the Fed is not only interested in increasing the speed of the taper, and increasing the number of tightenings by year-end (up to 3), they are also anxious to lower the Fed's balance sheet. Boom. Boom. Boom.
The US 10 year reached a high of 1.753%. That was the highest level since March 2021. The yields along the curve are also higher.
US stocks are mixed with the Dow up, and the NASDAQ continuing its decline to the downside (NASDAQ was down over 3% yesterday and is now 7% from its all-time high).
The price of oil is trading sharply higher as concerns about OPEC+ production potential has the market concerned. Unrest in Kazakhstan is also a concern. Kazakhstan is an exporter of oil (especially to China) as well is copper an important industrial metal.
US unemployment claims will be released at the bottom of the hour (last week came in at 198K). US trade balance will also be released at 8:30 AM. Factory orders and ISM service PMI will be released at 10 AM ET.
With focus on debt, the treasury will announce the auction scheduled for next week as well. Traders may be pricing in that concern as well.
A look around the markets as North American trading gets underway shows:
- Spot gold is down $18 or -1% at $1791.03. Higher yields in higher dollar are weighing on the precious metal
- Spot silver is down $0.69 or -23% at $22.11
- Crude oil is trading up $1.20 at $79.05. The high price reached $79.51 which was the highest level since November 18
- The price of bitcoin is not being the safe haven many hoped for. It is currently at $43,088. The low reached $42,414 which was close to the December low at $41,967.50
In the premarket for US stocks, investor flows are mostly into the Dow while the NASDAQ continues its move to the downside. The S&P is stuck between those extremes. Yesterday all three indices move down by at least 1% (Dow was down -1.07% with the NASDAQ index tumbling -3.34%). The futures this morning are implying:
- Dow industrial average +89 points after yesterday's -392 point decline. The Dow industrial average did reach a intraday high yesterday before falling sharply into the close
- S&P index is down -1 point after yesterday's -92.94 point decline
- NASDAQ index his down -91 points after yesterday's -522.54 point decline
In the European equity markets, major indices are lower after starting the year with gains over the first three days in most of the major indices:
- German Dax -1.2%
- France's CAC -1.3%
- UK's FTSE 100 -0.6%
- Spain's Ibex -0.33%
- Italy's FTSE MIB -1.3%
In the US, yields are higher across the board. The two year yield is up to 0.8596%. The 10 year yield reached a day high at 1.753%.
In the European debt market, the benchmark 10 year yields are also higher:
