As the North American session begins, the NZD is the strongest and the JPY is the weakest. The USD is mixed/modestly lower with gains vs the JPY and declines vs the AUD and NZD. The greenback is near unchanged vs the EUR, GBP, CHF and CAD to start the trading day.
The US and Russia will meet next week on Thursday. However, the tensions remain at elevated levels. Russia will conduct "long planned" nuclear and ballistic missile tests on Saturday. Russia says they have no plans on invading Ukraine. US warns a strike may take place within 5 days.
Despite the anxiety, the US stock market is having some relief in pre-market trading after yet another one of it's tumbles yesterday where the broader S&P index shed -2.12% and the Nasdaq fell -2.88%.
Yields today are mixed in early trading. The 10 year reached a high of 2.063% but is trading back below the 2.0% level at 1.967% to start the US session today. If the stocks continue to retreat, growth prospects could retreat as well. The regional indices continued to disappoint yesterday with the Philly Fed Manufacturing index falling to 16.0 from 23.2 last month. The Empire manufacturing was weaker than expected on Tuesday as well. Richmond Fed manufacturing index was also weaker than expectations in it's current release. On the other side of the economic coin, is that retail sales released earlier this week, was much better than expected, and inflation data remains elevated of course. Import prices rose 2.0% in January.
Overnight, UK retail sales were better than expected at 1.9% (vs 1.0%) but fell -4% in December (from -3.7%). ECBs Kazimir is looking to end QE by August giving the central bank flexibility on rates.
A look around the markets are showing:
- Spot gold is trading down $-6.60 or -0.35% at $1891.73. Yesterday gold surged around $29 on geopolitical concerns in Russia
- Spot silver is trading up down three cents -0.12% $23.78
- Crude oil for April delivery is trading down $1.77 at $88.27 on the easing of some of the tensions and hopes for an Iranian agreement
- Bitcoin is down trading at $40,482.19. The low today reached $40,112 which was just above the low from yesterday at $40,088. So there is some support developing ahead of the $40,000 level
In the premarket for US stocks, the major indices are retracing a portion of yesterday's sharp declines:
- Dow is up 137.97 points after yesterday's -622 point decline
- S&P index is up 23 points after yesterday's -94.76 point decline
- NASDAQ index is up 98 points after yesterday's -407.38 point tumble.
The European equity markets, the major indices are trading mixed. Yesterday the indices are all lower:
- German DAX -0.12%. Yesterday the index fell -0.67%
- France's CAC +0.47%. Yesterday the index fell -0.26%
- UK's FTSE 100 +0.36%. Yesterday the index fell -0.87%
- Spain's Ibex unchanged. Yesterday the index fell -0.76%
- Italy's FTSE MIB +0.45%.. Yesterday the index fell -1.11%
In the US debt market, yields are mixed with the shorter end higher and the longer end a bit lower (flatter yield curve). Yesterday, yields moved lower on flight to safety flows.
In the European debt market, the benchmark 10 year yields are trading with a negative bias today:
