The JPY is the strongest and the NZD is the weakest as the North American session begins.
The USDJPY has continued it's run to the downside, trading at the lowest level since June 16 and down sharply from the high reached on June 29 at 145.06. The low today reached 140.15.
US stocks in pre-market trading are slightly higher in the early morning session. The markets were helped yesterday following Monday's news on inflation. The Manheim Used Car survey and the NY Fed's Survey of Consumer Expectations showed lower levels, easing concerns ahead of Wednesday's key CPI release. Treasury yields are lower across the curve. A 25bps rate hike in July is still expected when the Fed meets on July 26. Fed's Bostic spoke yesterday and see's the case for a pause to let the hikes work through, while Fed's Daly is stumping for more than 2. The USD is marginally lower, and crude futures are gaining.
Overnight news showed:
- Japan: Preliminary machine tool orders in Japan saw a significant decline of 21.7% year-on-year, but was slightly better than last months -22.1%. This still indicates a slowdown in the manufacturing sector.
- Germany (EUR): The final Consumer Price Index (CPI) remained unchanged at 0.3% on a monthly basis, in line with the estimated figure of 0.3%. However, the German ZEW Economic Sentiment index showed a more pessimistic outlook with a decline to -14.7, surpassing the estimated decline of -10.7 (was -8.5 last month). This suggests concerns about the economic performance.
- United Kingdom (GBP): The number of people claiming unemployment benefits increased by 25.7K, surpassing the estimated increase of 20.5K. Last month the claimant count saw a decline of -22.5K (3 of 4 months have shown increasing claimant counts) . The average earnings index grew by 6.9% over the past three months, slightly exceeding the estimated rate of 6.8% and higher than last month's 6.7%. Not good news for inflation there. The unemployment rate remained did move higher as well to 4.0% from 3.8% last month and estimate. This is the highest since January 2022
- Italy (EUR): Italian industrial production experienced a notable growth of 1.6% on a monthly basis, surpassing the estimated growth of 0.6%. This indicates positive momentum in the Italian manufacturing sector.
- Eurozone (EUR): The overall economic sentiment in the Eurozone declined, with the ZEW Economic Sentiment index dropping to -12.2, slightly lower than the estimated decline of -10.2. This suggests a more negative sentiment among investors and analysts regarding the economic outlook for the region.
- The US NFIB Business Optimism index came in at 91.0 vs 89.4 last month hitting a 7-month high. Sales expectations improved further n the month but the tight labour market continues to drive concerns about inflation. That said, the percentage of business owners seen raising their average prices fell to just 29% - the lowest since March 2021.
The economic news calendar in the NA session shows weekly Redbook sales and the IBD/TIPP economic optimism index which is expected to rise to 45.3 from 41.7 last month. A reading below 50 is considered negative sentiment. The last positive reading was in August 2021. The treasury will auction off 3-year notes at 1 PM. Amazon's "Prime Day"... well days (it is 2) will begin today.
A snapshot of the markets currently shows:
- Crude oil is trading up $0.49 or 0.67% at $73.49. The 100-day moving average comes in at $73.73 today. Yesterday the price moved about that moving average but could not sustain momentum above the level.
- Spot gold is trading up $10.85 or 0.56% at $1935.86
- Silver is trading up to cents or 0.08% at $23.15
- Bitcoin is trading up marginally at $30,408. Yesterday at around 5 PM, the price was trading at $30,209
In the premarket for US stocks, the major indices are trading higher. Yesterday, the indices rose modestly and closed near the highs for the day
- Dow Industrial Average is trading up 38 points. It rose 209.52 points yesterday
- S&P index is trading up 8.25 points. It rose 10.58 points yesterday
- NASDAQ index is trading up 41 points. It rose 24.76 points yesterday
In the European equity markets, the major indices are trading modestly higher with the exception of the UK FTSE 100 after weaker employment data. Yesterday the major indices rose modesty:
- German DAX is up 0.56%. Yesterday the index rose 0.45%
- France's CAC is up 1.05% . Yesterday the index rose 0.45%
- UK's FTSE 100 is down -0.26%. Yesterday the index rose 0.23%%
- Spain's Ibex is up 0.38% . Yesterday the index rose 0.04%
- Italy's FTSE MIB is up 0.53% (delayed). Yesterday the index rose 34%
In the Asian Pacific market today, markets closed higher:
- Japan's Nikkei rose 0.04%
- Australia's S&P/ASX 200 index rose 1.5%
- China's Shanghai composite index rose 0.55%
- Hong Kong's Hang Seng index rose 0.97%
In the US debt market, yields are modestly higher in early US trading
- 2-year yield 4.849%, -1.3 basis points
- 5-year yield 4.212% , -3.3 basis points
- 10-year yield 3.968%, -3.8 basis points
- 30-year yield 4.006%, -3.6 basis points
In the European debt market, benchmark 10-year yields are mostly lower:
