The EUR is the strongest and the USD is the weakest as North American session begins


The strongest to weakest currencies as NA session begins

The EUR is the strongest and the USD is the weakest as the North American session begins. The USD has been the weakest of the majors for 3 consecutive days now. The declines today are more modest vs the others but greenback is now on the “other side” of the 100/200 hour MAs vs all the major currencies (that is the dollar lower bias side) with the exception of the CAD. The USDCAD is testing its 200 hour MA as I type though.

In the EU, they printed the highest flash CPI inflation reading in 30 years. The markets are pricing in a hike for July which runs counter to the thoughts of ECBs Lagarde.

US stocks are higher with the Nasdaq leading the way higher. AMD and Alphabet announced strong earnings and steered future numbers higher (took the likes of Nvdia and Meta higher in their wake). Alphabet also announced a 20:1 stock split. GM earnings were better as well despite the chip shortage. Paypal, on the other hand, guided much lower than expectations and is getting hammered.

The major indices are working on the 4th day in a row higher. That would be the longest win streak in 2022. The Nasdaq is up 9.56% from the low last week (and 7.44% from the low close).

US yields are mixed with a flatter yield curve. Fed officials said they are not all that concerned about the yield curve and that the US economy is a long way from entering a recession.

The run to the upside in stocks is remindful of years gone by, but I guess it IS Groundhog Day.

Groundhog day

It’s Groundhog Day

A snapshot look at the markets are showing:

  • Spot gold is trading up $4.20 or 0.23% $1804.30
  • Spot silver is up $0.22 or 0.98% at $22.84
  • Natural gas is moving higher in reaction to more cold in the east coast and tensions in Ukraine. The prices up $0.43 or 9.2% up $5.188.
  • WTI crude oil is trading up up for cents at $88.26. The OPEC-JMMC has recommended given production increases at 400,000 BPD
  • Bitcoin is trading at $38,657. The price around 5 PM yesterday was at $38,779.

In the premarket for US stocks, the major indices are trading higher with the NASDAQ surging to the upside today on the back of Alphabet and AMD. After the close today Meta (Facebook), Qualcomm, Spotify, T-Mobile will report with expectations for Meta likely ratcheted higher given Googles earnings. Looking ahead, tomorrow Nokia, Merck, Honeywell, Shell Oil will all report in the morning, while Amazon, Ford, Snap, Pinterest, Activision Blizzard will all post after the close. That would about do it for the “big” names this quarter earnings cycle.

  • Dow industrial average is up 35.76 points after yesterday’s 273.38 point rise
  • S&P index is is up 36 points after yesterday’s 30.99 point rise
  • NASDAQ index is up 244 points after yesterday’s 106.12 point rise

In the European equity markets, major indices are higher as they catch up to the strong afternoon gains in the US:

  • German DAX, +0.4%
  • France’s CAC +0.54%
  • UK’s FTSE 100, +0.75%
  • Spain’s Ibex, +0.5%
  • Italy’s FTSE MIB, +1.05%

US yields are mixed with the 2 year up about 1 basis point, while the long end is down 2-3 basis points (flatter curve).

US yields

US yields are mixed with a flatter curve

In Europe, the benchmark 10 year yields are marginally lower although the German 10 year remains above the parity level at 0.033%.

Europe 10 year yields

Europe 10 year yields are marginally lower


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