The NZD is the strongest and the CHF is the weakest as the NA session begins

The NZD NZD The New Zealand Dollar (NZD) is the official currency of New Zealand and the tenth most traded currency in the world. Also referred to as the Kiwi, the currency is also utilized in several Pacific islands, including Tokelau, the Cook Islands, Pitcairn islands, and Niue.The NZD’s history is long, extending back to 1934 with the creation of the Reserve Bank of New Zealand. While far from the most traded currency in the global forex market, the NZD has a key role nonetheless.The NZD is considered a The New Zealand Dollar (NZD) is the official currency of New Zealand and the tenth most traded currency in the world. Also referred to as the Kiwi, the currency is also utilized in several Pacific islands, including Tokelau, the Cook Islands, Pitcairn islands, and Niue.The NZD’s history is long, extending back to 1934 with the creation of the Reserve Bank of New Zealand. While far from the most traded currency in the global forex market, the NZD has a key role nonetheless.The NZD is considered a Read this Term is the strongest and the CHF is the weakest as the NA session begins. The USD is modestly lower a day after the Federal Reserve Federal Reserve The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the Read this Term, after a year of raising interest rates, hints at a possible end to its tightening cycle as economic growth slows and regional banks face challenges. Although the Fed statement said that new data and the overall effect of elevated rates would play a role in determining if additional increases are needed, which Powell termed a "meaningful" change in the its outlook, he also said that cutting rates would not be appropriate given expectations for inflation to take time to come down. The market meanwhile is betting the Fed has gotten it all wrong with the Fed Funds contracts pricing in cuts by September and decline in Fed Funds to 4.4% by January 2024. The market is also punishing the regional banks more in pre-market trading. The focus is now on PacWest Bancorp, who is exploring strategic options, including a potential sale or capital raise, as it sits on the knife's edge of collapse.

Shares of regional banks under pressure today include:

• PacWest Bancorp -36% at $4.10
• Zion bank -9.66% at $20.47
• Comerica -6.46% at $33.28
• KeyCorp -5.25% and $9.03

The KRE regional bank ETF is trading down an additional -3.77% in premarket trading today.

Meanwhile, the clock keeps ticking to a debt default in the US without action. While Republicans and Democrats are publicly sticking to their demands, behind the scenes, the White House is exploring alternative strategies. These include a short-term increase in the borrowing limit to buy more time for a compromise and experimental ways to pay the government's bills even without raising the debt limit. President Biden plans to meet with lawmakers to discuss spending and debt. However, skepticism remains among lawmakers, and alternative measures, such as using available resources to prioritize debt payments, issuing high-interest rate bonds, or relying on the 14th amendment, are being explored. The idea of minting a trillion-dollar coin is not under consideration.

The European Central Bank is likely to raise interest rates by 25 basis points (maybe 50 bps but less likely) but may adopt a more cautious approach due to inflation data and banks tightening credit availability. Analysts predict at least two more rate hikes in the ECB's current campaign. The decision will be announced at 8:15 AM ET.

Today in Europe, the PMI services indices were announced. The data shows a mixed picture, with some countries experiencing growth in their services sectors while others show slight moderation.:

• Spanish Services PMI: 57.9 (previous: 59.2, expected: 59.4)
• Italian Services PMI: 57.6 (previous: 56.6, expected: 55.7)
• French Final Services PMI: 54.6 (previous: 56.3, expected: 56.3)
• German Final Services PMI: 56.0 (previous: 55.7, expected: 55.7)
• Eurozone Final Services PMI: 56.2 (previous: 56.6, expected: 56.6)
• UK Final Services PMI: 55.9 (previous: 54.9, expected: 54.9)

In addition to the ECB rate decision today:

• CAD Trade Balance: Expected to be 0.3B, previous value was 0.4B.
• USD Unemployment Claims: Expected to be 239K, previous value was 230K.
• USD Prelim Nonfarm Productivity q/q: Expected to be -1.7%, previous value was 1.7%.
• USD Prelim Unit Labor Costs q/q: Expected to be 5.6%, previous value was 3.2%.
• USD Trade Balance: Expected to be -63.7B, previous value was -70.5B.

It'll be another day before the Fed official start to chirp.

US stock futures remain subdued in premarket trading (down for the 3rd consecutive day in May?). Apple is expected to announce earnings after the close. A decline in sales is expected, but the company could unveil a significant increase in its share buyback program. Shares in premarket are trading down -1.41% in premarket trading. US yields continue to tumble.

A look around the markets currently shows

• spot gold is trading down $1.26 or -0.06% at $2041.55
• spot silver is trading unchanged at $25.60
• WTI crude oil is trading near unchanged $68.57
• bitcoin is trading marginally higher $29,179

In the premarket of US stocks are lower. The first 2 days of May trading have been to the downside:

• Dow industrial average down -134 points after yesterday's -270.29 point decline
• S&P index is down -16.5 points after yesterday's -28.83 point decline
• NASDAQ index is down -9 points after yesterday's -55.18 point decline

in the European equity markets, major indices are also lower:

• German DAX -142 points or -0.9%
• Frances CAC - 2.24 points or -1.11%
• UK's FTSE 100 -67.41 points or -0.86%
• Spain Ibex -98.2 points or -1.08%

In the US a debt market yields are sharply lower especially in the shorter end. Yesterday rates also moved sharply lower despite the Fed hike. The 30 year bond is unchanged:

• 2 year yield 3.819% -12 basis points
• 5 year yield 3.31% -10 basis points
• 10 year yield 3.356% -4.7 basis points
• 30 year yield 3.716% unchanged

In the European debt market ahead of the ECB rate decision, the benchmark 10 year yields, are trading marginally higher:

PS. Below is a summary of the earnings releases mentioned:

Paramount Global (PARA) Q1 2023 (USD):

• Adj. EPS: $0.09 (expected $0.17)
• Revenue: $7.26 billion (expected $7.42 billion)

Peloton (PTON) Q3 2023 (USD):

• EPS: -$0.79
• Revenue: $748.9 million (expected $711.7 million)
• Adj. EBITDA loss: $18.7 million (expected loss $43.3 million)

Shopify (SHOP) Q1 2023 (USD):

• Revenue: $1.51 billion (expected $1.43 billion)
• Job cuts and selling majority of logistics business

ConocoPhillips (COP) Q1 2023 (USD):

• Adj. EPS: $2.38 (expected $2.11)
• Revenue: $15.52 billion (expected $15.75 billion)
• Q2 production view: 1.77-1.81 million BOE/D
• Narrows FY production view to 1.78-1.80 million BOE/D

Hyatt Hotels Corp (H) Q1 2023 (USD):

• Adj. EPS: $0.41 (expected $0.48)
• Revenue: N/A (expected $1.58 billion)
• Raises FY RevPAR and continues to experience favorable booking trends