The GBP is the strongest and the CHF is the weakest as the North American session begins

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The GBP is the strongest and the CHF is the weakest

The GBP is the strongest and the CHF is the weakest as the North American session begins.

Overnight the NZ employment report came in stronger than expectations (see details below). The NZD is currently mostly higher on the day:

  • Employment Change q/q: Actual 0.4%, Forecast 0.3%, Prior -0.1%.
  • Unemployment Rate: Actual 4.0%, Forecast 4.3%, Prior 3.9%.
  • Labor Cost Index q/q: Actual 1.0%, Forecast 0.8%, Prior 0.8%.

German Industrial production came in at weaker at -1.6% vs -0.4% estimate.

Sarah Breeden, Deputy Governor of the Bank of England, spoke today. She has recently expressed a shift in her stance regarding the need for further tightening of interest rates (less hawkish). In her remarks, Breeden disclosed that her concerns about the necessity for increased rates have diminished. She underscored the importance of gathering more evidence to ensure that the UK economy is advancing according to forecasts. Breeden’s attention is now primarily on determining the duration for which the current interest rate levels should be maintained. This approach involves closely observing the impact of pay growth and demand on the pricing decisions of firms, indicating a nuanced and data-driven strategy towards managing monetary policy in the face of economic uncertainties.

Central banker Isabel Schnabel of the European Central Bank spoke and highlighted the challenges the ECB faces in its ongoing efforts to control inflation. She warned that the final stages of reducing inflation could prove to be the most arduous, citing persistent inflation in the services sector and a robust labor market as contributing factors. Schnabel also pointed out the easing of financial conditions, with markets anticipating rate cuts more aggressively than might be warranted. Moreover, recent developments in the Red Sea have raised concerns about potential disruptions to supply chains, adding another layer of complexity to the economic outlook. Despite these challenges, Schnabel acknowledged the significant progress made in curbing inflation but emphasized that the goal has not yet been fully achieved. She advocated for a patient and cautious approach to policy adjustment, warning that inflationary pressures could re-emerge if actions are taken prematurely. Schnabel is one of the more hawkish of members on the ECB board.

Today, Kashkari is on CNBC this morning. Also on the schedule today from the Fed are Mester, Collins , Barkin and Kugler.

We are getting the tail end of the earnings (although Nvidia does not report until the February 21). After the close yesterday Snap (MISS – -30.5%), Chipotle (BEAT – shares up 2.46%), Fortinet (BEAT – shares up 9.0%), Ford (BEAT – shares up 6.13%) reported.

  • Today, the major releases shows:

Yum! Brands Inc (YUM) Q4 2023 (USD):

  • Adj. EPS: $1.26 (exp. $1.40) – MISS
  • Revenue: $2.04 billion (exp. $2.11 billion) – MISS
  • Same-Store Sales (SSS): -1% (exp. -3.9%) – BEAT

Emerson Electric Co (EMR) Q1 2024

  • Adj. EPS: $1.22 vs. expected $1.04 – BEAT
  • Revenue: $4.11 billion vs. expected $3.92 billion – BEAT
  • Q2 Revenue Growth View: 12.5-14.5% (Midpoint: 13.5%) vs. expectation not specified
  • Q2 Adj. EPS View: $1.22-$1.26 vs. consensus $1.25 – Within Range
  • Shares are up 1.27% in premarket

Über Technologies Inc (UBER) Q4 2023

  • EPS: $0.66 vs. expected $0.17 – BEAT
  • Revenue: $9.94 billion vs. expected $9.76 billion – BEAT
  • Shares are little change in premarket but is up 14.46% in 2024 so far.

Alibaba Group Holding Ltd (BABA) Q3 2023

  • EPS: $2.67 vs. expected $2.67 – MEET
  • Revenue: $36.669 billion vs. expected $36.41 billion – BEAT
  • Note: Alibaba’s board has approved a USD 25 billion share buyback.
  • Shares are down -0.68% premarket.

CVS Health Corp (CVS) Q4 2023

  • Adj. EPS: $2.12 vs. expected $1.99 – BEAT
  • Revenue: $93.8 billion vs. expected $90.4 billion – BEAT
  • Shares are up 0.33% in premarket.

Hilton Worldwide Holdings Inc (HLT) Q4 2023

  • EPS: $1.68 vs. expected $1.57 – BEAT
  • Revenue: $2.609 billion vs. expected $2.61 billion – MEET
  • FY Adj EPS View: $6.8-$6.94 vs. expected $6.11 – BEAT
  • Shares are down -0.64% in premarket.

A snapshot of the markets as the North American session begins currently shows:

  • Crude oil is trading up $0.59 or 0.80% at $73.90. At this time yesterday, the price was trading at $73.30
  • Gold is trading down -$3.80 or -0.18% at $2031.61. At this time yesterday, the price was trading at $2027
  • Silver is trading down -$0.14 or -0.64% at $22.26. At this time yesterday, the price was trading at $22.29
  • Bitcoin traded at $42,968. At this time yesterday, the price was trading at $42,632

In the premarket for US stocks, the major indices are now higher:

  • Dow Industrial Average futures are implying a gain of 8.64 points. Yesterday, the index rose 141.24 points or 0.37%
  • S&P futures are implying a gain of 8.52 points. Yesterday, the index rose 11.42 points or 0.23%.
  • Nasdaq futures are implying a modest gain of 58 points. Yesterday, the index rose 11.32 points or 0.07%

In the European equity markets, the major indices are trading mixed.

  • German DAX, -0.26%
  • France CAC -0.17%
  • UK FTSE 100, -0.39%
  • Spain’s Ibex,- 0.90%
  • Italy’s FTSE MIB, -0.24% (delayed by 10 minutes).

Shares in the Asian Pacific markets were mixed. China and Hong Kong shares sword

  • Japan’s Nikkei 225, 0.11%
  • China’s Shanghai composite index , +1.44%
  • Hong Kong’s Hang Seng index, -0.34%
  • Australia S&P/ASX, 0.45%

Looking at the US debt market, yields are marginally higher after falling yesterday. The 3-year auction got a solid “B” grade thanks to strong international demand. There was a negative tail. The Bid to cover and domestic demand was a little weak compared to 6-month averages. The stakes are higher today with the auction of 10-year notes at 1 PM ET.

  • 2-year yield 4.418% +1.0 basis points. At this time yesterday, the yield was at 4.455%
  • 5-year yield 4.066% +2.2 basis points. At this time yesterday, the yield 4.110%
  • 10-year yield 4.124% +3.3 basis points.. At this time yesterday, the yield was at 4.161%
  • 30-year yield 4.329% +3.4 basis points. At this time yesterday, the yield was at 4.349%
  • The 2-10 year spread is at -28.9 basis points. At this time yesterday, the spread was at -29.4 basis points
  • The 2-30 year spread is at -9.0 basis points. At this time yesterday, the spread was at -10.7 basis points.

In the European debt market, the benchmark 10-year yields are mixed

European benchmark 10 year yields

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