The USD is the strongest and the AUD is the weakest as the NA session begins

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As the North American session begins the USD is the strongest of the major currencies and the AUD is the weakest. Although the USD is strongest it has seen volatile up and down price action. The dollar was higher earlier in the day. It is retracing some of the gains.

Today the FOMC rate decision will be announced at 2 PM ET. The Fed is expected to keep rates unchanged but the market will be focused on the statement and the comments from Fed Chair Powell. Will he signal that with inflation coming day, the Fed has room to take back some of the hikes, or will he push off the markets expectations for cuts as growth remains elevated, employment is still solid and inflation expectations although lower, are still a concern. In December, the Fed signalled that they saw the Fed Funds target moving down to 4.60% from the current 5.25% to 5.5%.

US stocks are mixed with the broader S&P and Nasdaq sharply lower after earnings from Microsoft, Alphabet and AMD after the close yesterday was interpreted negatively (sell the fact for some) by the markets (among others – see earnings here). Microsoft shares are down -0.76% in premarket trading, Alphabet shares are down -5.59%, and AMD shares are down -4.97%. On the positive side, Stryker shares are up 6.49% after announcing their earnings, and Starbucks shares are also higher by 3.67%.

Today, the list of earnings with qualifiers if they BEAT, MISSED or MET is below:

Hess Corp (HES) Q4 2023:

  • Adj. EPS: $1.63 BEAT (exp. $1.44)
  • Revenue: $3.04B BEAT (exp. $2.58B)
  • E&P Capex: $1.48B BEAT (exp. $1.33B)

Boeing Co (BA) Q4 2023:

  • Adj. EPS: -$0.74 BEAT (exp. -$0.78)
  • Revenue: $22.02B BEAT (exp. $21.1B)
  • Note: Abandons forecasts

Teva Pharmaceutical Industries Ltd (TEVA) Q4 2023:

  • Adj. EPS: $1.00 BEAT (exp. $0.77)
  • Revenue: $4.5B BEAT (exp. $4.01B)

Phillips 66 (PSX) Q4 2023:

  • Adj. EPS: $3.09 BEAT (exp. $2.35)

Automatic Data Processing Inc (ADP) Q4 2023:

  • EPS: $2.13 BEAT (exp. $2.10)
  • Revenue: $4.7B BEAT (exp. $4.66B)

Aptiv PLC (APTV) Q4 2023:

  • Adj. EPS: $1.40 BEAT (exp. $1.33)
  • Revenue: $4.9B MISSED (exp. $5.07B)

Roper Technologies Inc (ROP) Q4 2023:

  • Adj. EPS: $4.37 BEAT (exp. $4.34)
  • Revenue: $1.61B BEAT (exp. $1.58B)

Boston Scientific Corp (BSX) Q4 2023:

  • EPS: $0.55 BEAT (exp. $0.51)
  • Revenue: $3.73B BEAT (exp. $3.59B)

The weekly mortgage data out of the US was released earlier with applications down -7.2% after rising 3.7% last week. The 30-year mortgage remained unchanged at 6.78%. That is up from the 6.7% cycle low.

The German state CPI for January came in a bit lighter than expectations overall. The headline CPI came in at 0.2% vs 0.2% expected. The preliminary year on year came in lower at 2.9% vs 3.0% estimate. The HICP preliminary came in a touch lower at -0.2% vs -0.1% estimated with YoY lower than expected at 3.1% vs 3.2% estimate.

In other data in Japan and Europe today:

  • Japan Consumer Confidence: 38.0 BEAT (Forecast: 37.6, Previous: 37.2)
  • Japan Housing Starts y/y: -4.0% BEAT (Forecast: -6.6%, Previous: -8.5%)
  • German Import Prices m/m: -1.1% MISSED (Forecast: -0.6%, Previous: -0.1%)
  • German Retail Sales m/m: -1.6% MISSED (Forecast: 0.6%, Previous: -2.5%)
  • UK Nationwide HPI m/m: 0.7% BEAT (Forecast: 0.1%, Previous: 0.0%)
  • CHF Retail Sales y/y: -0.8% MISSED (Forecast: 0.9%, Previous: -1.5%)
  • French Prelim CPI m/m: -0.2% LOWER(Forecast: 0.0%, Previous: 0.1%)
  • German Unemployment Change: -2K LOWER (Forecast: 11K, Previous: 24K)
  • Swiss Credit Suisse Economic Expectations: -19.5 BEAT (Previous: -23.7)
  • Italian Monthly Unemployment Rate: 7.2% BEAT (Forecast: 7.5%, Previous: 7.4%)

In the US today, the need ADP employment statistics will be released at 8:15 AM with expectations at 145K vs 164K last month. The more followed BLS employment data will be released on Friday with estimates centered around 187K. At 8:30 AM ET, US employment costs for the fourth quarter will also be released with expectations of 1.0% versus 1.1% in the third quarter. Canada GP for November will also be released at 8:30 AM with expectations of 0.1%.

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

  • Crude oil is trading down -$0.80 or -1.03% at $77.01. At this time yesterday, the price was trading at $76.26
  • Gold is trading up $1.90 or 0.09% at $2038.60. At this time yesterday, the price was trading at $2034.90
  • Silver is trading down four cents or -0.17% at $23.11. At this time yesterday, the price was trading at $23.10
  • Bitcoin traded at $42,596. At this time yesterday, the price was trading at $43,291.

In the premarket for US stocks, the broader S&P and NASDAQ indices are lower after mixed results yesterday

  • Dow Industrial Average futures are implying a gain of 58 points. Yesterday the index rose 133.86 points or 0.35%
  • S&P futures are implying a loss of -20.08 points. Yesterday the index fell -2.98 points or -0.06%
  • Nasdaq futures are implying a loss of -148 points. Yesterday the index fell -118.15 points or -0.76%

In the European equity markets, the major indices are trading higher:

  • German DAX, unchanged
  • France CAC +0.17%
  • UK FTSE 100, +0.14%
  • Spain’s Ibex, +0.71%
  • Italy’s FTSE MIB, +0.77% (delayed by 10 minutes).

Shares in the Asian Pacific markets were mixed.. China/Hong Kong continued to move back to the downside after days’ last week

  • Japan’s Nikkei 225, rose 0.61%
  • China’s Shanghai composite index , fell -1.48%
  • Hong Kong’s Hang Seng index, fell -1.39%
  • Australia S&P/ASX, rose 1.06%

Looking at the US debt market, yields are trading lower to start the trading day.

  • 2-year yield 4.315% -4.3 basis points. At this time yesterday, the yield was at 4.318%
  • 5-year yield 3.953% -4.4 basis points. At this time yesterday, the yield was at 3.984%
  • 10-year yield 4.026% -3.1 basis points. At this time yesterday, the yield is 4.071%
  • 30-year yield 4.256% -2.2 basis points. At this time yesterday, the yield was at 4.299%
  • The 2-10 year spread is at -28.8 basis points. At this time yesterday, the spread was at -24.8 basis points
  • The 2-30 year spread is at -0.6 basis points. At this time yesterday, the spread was at -1.8 basis points.

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

European benchmark 10 year yields

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