forex

The JPY is the strongest and the GBP is the weakest as the NA session begins. The USD is mixed to modestly lower mainly because of the -1.02 decline in the JPY. The other changes vs the major currencies are showing modest changes on the day with the USD higher vs the EUR, GBP, CAD, AUD and NZD.

The US PCE data will be released at 8:30 AM ET with the headline MoM estimated at 0.1%, while the core PCE is expected at 0.2%. The YoY measures are 2.3% and 2.7% respectively.

Also scheduled for release are trade data, retail and wholesale inventories, and University of Michigan sentiment final numbers for September (69.3 est vs 69.0 preliminary). Canada GDP for July will be released at 8:30 AM with estimate at 0.1% vs 0.0% last.

The China and Hong Kong stocks continued their run to the upside to end the week with the Shanghai Composite rising 2.88% and the Hong Kong Hang Seng index up 3.55%. For the week:

  • Shanghai Composite index surged 12.81% which was its best week since November 2008
  • Hang Seng Index rose 13.00%, its strongest week since October 1998

An interesting post fom Eamonn outlining UBSs expectations for the major central banks. UBS sees:

  • Fed’s easing cycle is just getting started, UBS see another 50 bp of cuts this year and 100 in 2025
  • Bank of Japan to raise short-term rates by 25 basis points by the middle of 2025
  • Sees the most aggressive easing moves from the Reserve Bank of New Zealand, 200 basis points of cuts by September 2025
  • Reserve Bank of Australia is likely to wait until Q1/Q2 before starting its easing cycle, expect 75 basis points of easing by September 2025
    • AUD is UBS' 'most preferred', it'll benefit from China's measures.
  • Bank of Canada will see 150 basis points of reductions by September 2025

A snapshot of the other markets as the North American session begins shows:

  • Crude oil is trading up $0.14 and $67.81. At this time yesterday, the price was at $67.86
  • Gold is trading down $6.40 or -0.23% at $2665.67. At this time yesterday, the price was $2681.61
  • Silver is trading unchanged on the day at $31.99. At this time yesterday, the price is at $32.58.
  • Bitcoin is trading at $65,439. At this time yesterday, the price was at $64,360
  • Ethereum is trading at $2653.30. At this time yesterday, the price was at $2624.50

In the premarket, the snapshot of the major indices trading marginally higher :

  • Dow Industrial Average futures are implying a gain of 32.89. Yesterday, the index rose 260.36 points or 0.62% at 42175.11
  • S&P futures are implying a gain of 3.26 points. Yesterday, the price rose 23.11 points or 0.40% at 5745.37. It was a another record close
  • Nasdaq futures are implying a gain of 8.71 points. Yesterday, the index rose 108.09 points or 0.60% at 18190.29

Yesterday, the small-cap Russell 2000 rose 12.41 points or 0.57% at 2209.87

European stock indices are trading higher

  • German DAX, +0.99%. For the week the index is up 3.77%
  • France CAC, +0.41%. For the week index is up 3.64%
  • UK FTSE 100, +0.43%. For the week the index is up 1.10%.
  • Spain's Ibex, +0.30%. For the week the index is up 1.97%
  • Italy's FTSE MIB, +0.68% (delayed 10 minutes). For the week the index is up 2.59%

Shares in the Asian Pacific markets China and Hong Kong continue to search after aggressive China stimulus:

  • Japan's Nikkei 225, +2.32%. For the week the index is up 5.58%
  • China's Shanghai Composite Index, +2.88%. For the week the index soared 12.81%.
  • Hong Kong's Hang Seng index, 3.55%. For the week index soared 13.00%
  • Australia S&P/ASX index, 0.10%. For the week the index was unchanged.

Looking at the US debt market, yields are higher

  • 2-year yield 3.612%, -1.1 basis points. At this time yesterday, the yield was at 3.534%
  • 5-year yield 3.548%, -0.9 basis points. At this time yesterday, the yield was at 3.501%
  • 10-year yield 3.779%, -1.0 basis points. At this time yesterday, the yield is at 3.758%
  • 30-year yield 4.111%, -1.2 basis points..At this time yesterday, the yield is at 4.115%

Looking at the treasury yield curve, is similar to yesterday's levels at this time

  • The 2-10 year spread is at +16.7 basis points. At this time yesterday, the yield spread was +22.3 basis points.
  • The 2-30 year spread is at +49.8 basis points. At this time yesterday, the yield spread was was 57.8 basis points.

In the European debt market, the 10 year yields are mostly lower:

Europe