The NZD is the strongest and the USD is the weakest as the North Ameican session begins.
Yesterday, Chair Powell (and Fed Gov. Jefferson) declined to state that rate cuts were likely to be appropriate this year (omitting is just as good as saying it), which was a shift in the mindset of the Fed. The Chair and Vice Chair stated that inflation was not showing improvement. The market now has September as the month that the Fed may cut rates.
In the European morning session today, the U.K.'s consumer price inflation fell to 3.2% YoY, marking the lowest rate in over two years, and lower than February's 3.4%. The reduction was primarily due to a slower rise in food prices compared to the previous year. However, fuel prices did increase. Core inflation also declined to 4.2% from February's 4.5%. Earlier this week, employment data showed a slowdown in core wage growth. The Bank of England has kept its interest rates at their highest since 2008. BOEs Bailey recently said that the U.K. economy is nearing a stage where interest rates could begin to be reduced, observing strong signs of disinflation at full employment.
The weekly US mortgage data was released. Applications (and all of the other components) rose despite higher rates:.
- Mortgage Refinance Index: Increased to 500.7 from 498.3 (Stronger)
- Purchase Index: Rose to 145.6 from 138.7 (Stronger)
- US Mortgage Market Index: Grew to 202.1 from 195.7 (Stronger)
- Mortgage Applications: Jumped to 3.3% from 0.1% (Significantly stronger)
- 30-Year Mortgage Rate: Increased to 7.13% from 7.01%
Affordability is at its lowest level since 1980.
US stocks are higher. US yield are little changed.
In Israel, there was quiet. Yesterday, threats were made by Israel of a retaliatory strike in some form or fashion against Iran.
Crude oil today is lower. The private inventory data released late yesterday showed a stronger than expected builder 4.09M barrels, but gasoline and distilates both showed declines. The EIA will release their inventory data at 10:30 AM with expectations of a buildup of 1.373M crude oil stocks. Gasoline is expected to show a drawdown of -0.889M. The private data yesterday came at:
A snapshot of the other markets as the North American session begins currently shows.:
- Crude oil is trading down $0.57 or -0.67% at $84.80. At this time yesterday, the price was at a $84.96
- Gold is trading up $5.16 or 0.21% at $2387.80. At this time yesterday, the price was $2372.82
- Silver is trading up $0.40 or 1.41% at $28.46. At this time yesterday, the price was at $28.26.
- Bitcoin currently trades at $62,846 – not far off of the level at this time yesterday. At this time yesterday, the price was trading at $62,980
In the premarket, the major indices are trading higher:
- Dow Industrial Average futures are implying a gain of 85.03 points. Yesterday, the index gained 63.86 points or 0.17% at 37798.98 (thanks to a 6% gain in UnitedHealth).
- S&P futures are implying a gain of 15.34 points. Yesterday, the index fell minus 10.41.4 -0.21% at 505140
- Nasdaq futures are implying a gain of 45.10 points. Yesterday, the index fell -19.77 points or -0.12% at 15865.25
The European indices are trading higher:
- German DAX, +0.47%
- France CAC , +1.29%
- UK FTSE 100, was 0.66%
- Spain's Ibex, +1.34%
- Italy's FTSE MIB, +1.07% (delayed 10 minutes)
Shares in the Asian Pacific markets were mostly lower:
- Japan's Nikkei 225, but is 1.32%
- China's Shanghai Composite Index, +2.14%
- Hong Kong's Hang Seng index, +0.02%
- Australia S&P/ASX index, -0.09%
Looking at the US debt market, yields are marginally higher. Yesterday yields moved higher on the back of flight to safety flows reversal, and then stronger retail sales
- 2-year yield 4.964%, unchanged. At this time Friday, the yield was at 4.944%
- 5-year yield 4.674%, -0.7 basis points. At this time Friday, the yield was at 4.658%
- 10-year yield 4.651%, -0.6 basis points. At this time Friday, the yield was at 4.682%
- 30-year yield 4.757% unchanged. At this time Friday, the yield was at 4.752%
Looking at the treasury yield curve spreads, the yield curve statement over the last 24 hours:
- The 2-10 year spread is at -31.1 basis points. At this time Friday, the spread was at -30.1 basis points
- The 2-30 year spread is at -20.8 basis points. At this time Friday, the spread was at -19.2 basis points
European benchmark 10-year yields are higher: