The USD is the strongest and the NZD is the weakest as the NA session begins. Trading desks are at full force after the celebrated New Years Day on Monday, January 2nd as most markets (stocks and bonds) were closed. The forex market was open, however. The dollars rise today comes amidst a rising stock market in Europe and higher prices in pre-market trading in the US as well. Asian Pacific indices were mixed with Hang Seng index higher (+1.84%), but Japan's Nikkei unchanged after giving up gains on the day. The New Zealand and Australia major indices were also lower on the day.
The China covid news is brightening a bit with hopes that the after spiking, the covid cycle will evenutally complete itself and lead to stronger economic growth ahead (NOTE there will be many ups and downs). Reports that Foxconn is now back operating is one of the back stories supporting the thesis. Having said that, China's Caixin PMI index did show weaker than expected levels overnight with a reading of 49.0 vs 49.2 estimate and 49.4 last month.
In Europe, the German preliminary CPI did come in weaker than expectations today with a decline of -0.8% vs -0.6% estimate. Warmer weather is also easing inflationary concerns (Natural gas futures are down -9% on the day), and contributed to the tumbling EURUSD (and GBPUSD) today.
In contrast to the normal reaction to a higher dollar (or vice versa), US yields are not trading higher but are trading lower to start the trading year.
Tesla reported 4th quarter reported less than expected sales of 405K vs 417K est. The YoY 1.31M was also below expectations. Annual sales grew 40% which was below expectations that average YoY sales growth would be 50% on average. China and increased competition are the reasons for the declines (prices may also be a contributor). The stock remains under pressure after falling -65% in 2022.
In other markets:
- spot gold is trading up $10 or 0.55% at $1833.40
- spot silver is trading up $0.29 or 1.2% at $24.25
- WTI crude oil is trading down $1.11 at $79.14
- bitcoin is trading at $16,703. It traded as high as $16,782 over the extended weekend
in the pre-work of US stocks, the major indices are trading higher:
- Dow Industrial Average is up 100 points after Friday's -73.55 point decline
- S&P index is trading up 13.75 points after Friday's -9.78 point decline
- NASDAQ index is trading up 58 points after Friday's -11.61 point decline
in the European equity markets, the major indices are higher:
- German DAX +0.76%
- Francis CAC +0.53%
- UK's FTSE 100 +1.28%
- Spain's Ibex +0.36%
- Italy's FTSE MIB +0.97%
in the US debt market, yields are lower to start the trading year:
- two year 4.357%, -4.6 basis points
- five year 3.881% -8.2 beta's points
- 10 year 3.740% -8.9 basis points
- 30 year 3.848% -8.9 basis points
in the European debt market, the benchmark 10 year yields are trading lower.
