The NZD is the strongest and the CHF is the weakest as the North American session begins with the NZD being the big move on the day.
The catalyst for the move in the NZD was a report that ANZ now predicts that the Reserve Bank of New Zealand (RBNZ) will increase the Official Cash Rate (OCR) by 25 basis points in both February and April, bringing it to a total of 6%, which deviates from the consensus view. This forecast is based on a series of small, but unwelcome surprises in economic data, leading ANZ to believe that the RBNZ will not feel confident that it has sufficiently met its inflation targets. The OCR is currently at 5.5%, and while the market is largely expecting the RBNZ to maintain rates in the upcoming February meeting, with a 90% anticipation of a hold decision, ANZ stands out by anticipating rate hikes in both the February 28 and April 10 meetings.
US CPI seasonal CPI revisions will be released at 8:30 AM ET (from 2019 to 2023). Fed's Waller in January emphasized the importance of the upcoming CPI revisions, indicating that these revisions, particularly for 2023, could significantly alter the understanding of inflation trends. He expressed a cautious optimism, hoping the revisions would validate the observed progress in controlling inflation. However, he also stressed that policy decisions should be data-driven rather than based on hope, highlighting the Fed's commitment to respond adaptively to new information. Fed Powell's response to a question about the CPI revisions and their impact on his confidence in the inflation trajectory was non-committal, indicating a wait-and-see approach. He acknowledged the importance of the revisions but refrained from speculating on their impact, referencing the unpredictability marked by previous surprises.
Canada's employment data will be released at 8:30 AM as well. Employment change is expected at 15.0 K versus 0.1 K last month. The unemployment rate is expected to 5.9% versus 5.8%. There are no US data releases today.
US stock futures are higher in premarket trading after record closes again in the Dow Industrial Average and a S&P index yesterday. Yields are mixed with the shorter and higher in the longer end lower. The coupon auctions this week were successful with the 30-year distributed with a -2.0 basis point tail.
A snapshot of the markets as the North American session begins currently shows:
- Crude oil is trading near unchanged at $76.20. At this time yesterday, the price was trading at $74.65
- Gold is trading down -$3.87 or -0.19% at $2029.69. At this time yesterday, the price was trading at $2026
- Silver is trading up four cents or 0.20% at $22.59. At this time yesterday, the price was trading at $22.29
- Bitcoin is continuing its run to the upside. The current price trades at $47,415. At this time yesterday, the price was trading at $44,704
In the premarket for US stocks, the major indices are trading higher. The S&P and Dow Industrial Average closed at record levels yesterday. The S&P index rose modestly yesterday and surpassed the 5000 level for the first time at 5000.40, but backed off modestly into the close. The index is on pace for a opening above the 5000 level in trading today.
- Dow Industrial Average futures are implying a gain of 45.67 points. Yesterday, the index rose 48.97 points or 0.13% at 38726.34. That was a new all-time record close
- S&P futures are implying a gain of 10.3 points. Yesterday, the index rose 2.87 points or 0.06% at 4997.92. That also was a new all-time record close
- Nasdaq futures are implying a gain of 62.08 points. Yesterday, the index rose 37.07 points or 0.24% at 15793.71
In the European equity markets, the major indices are trading higher:
- German DAX, +0.16%. For the week the index is up 0.42%.
- France CAC +0.01%. For the week index is up 0.97%
- UK FTSE 100, +0.17%. For the week the index is down -0.10%
- Spain's Ibex,+ 0.06%. For the week the index is down -1.50%
- Italy's FTSE MIB, +0.35% (delayed by 10 minutes).
Shares in the Asian Pacific markets were mixed.
- Japan's Nikkei 225, +0.09%. For the week the index rose 2.04%.
- China's Shanghai composite index , +1.28%. For the week the index rose 4.97%..
- Hong Kong's Hang Seng index, -0.83%. For the week the index rose 1.37%
- Australia S&P/ASX, +0.07%. For the week the index fell -0.70%
Looking at the US debt market, yields are mixed.
- 2-year yield 4.49%, +3.2 basis points. At this time yesterday, the yield was at 4.437%
- 5-year yield 4.145% +2.2 basis points. At this time yesterday, the yield was at 4.090%
- 10-year yield 4.179% +0.9 basis points.. At this time yesterday, the yield was at 4.138%
- 30-year yield 4.375% -0.5 basis points. At this time yesterday, the yield was at 4.343%
- The 2-10 year spread is at - -30.9 basis points. At this time yesterday, the spread was at -29.8 basis points
- The 2-30 year spread is at -11.0 basis points. At this time yesterday, the spread was at -8.4 but basis points.
In the European debt market, the benchmark 10-year yields are little changed:
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