The NZD is the strongest and the USD is the weakest as the NA session begins. The US CPI data will be released at 8:30 AM ET. Adam posted a preview HERE. The headline is expected to rise by 0.2% and the YoY is expected to increase to 3.2% or as Adam points out 3.3%. The rise is due to a -0.1% dropping off from 12 months ago. What is ahead is the next two-month MoM gains from a year ago are at 0.5% and 0.4%. Those figures will be replaced by new numbers which if 0.1% to 0.2% will see a decline in the index by 0.5% to 0.7%. It still is not 2.0% but the trend is more toward that target. Also shelter costs are STILL expected to move lower. That is a wild card to monthly data.
Yesterday Fed's Williams spoke. Some of his comments suggested a slowing of the hype to lower rates:
Economic Balance and Inflation:
- The Fed observes meaningful progress in restoring economic balance.
- Acknowledges that there is still significant work to do to bring inflation back to the 2% target.
- Notes an improvement in the inflation situation.
- Forecasts inflation ebbing to 2.25% in 2024 and 2% in 2025.
Employment and Economic Growth:
- Positive outlook on the job front, with things looking very good.
- For 2024, expects GDP around 1.25% and unemployment at 4%.
Risk Assessment and Future Outlook:
- Points out that risks to the economy are two-sided.
- Emphasizes that rate decisions will be driven by the totality of data.
- Acknowledges the uncertainty in the outlook, with rate decisions to be made meeting-by-meeting.
Federal Reserve's Monetary Policy Stance:
- Stresses the need for a restrictive policy stance for some time.
- Suggests the Fed can cut rates when confident that inflation is moving back to 2%.
- Reiterates that the Fed’s work to bring inflation back to 2% is not yet complete.
Bitcoin is trading highe after SEC approval of the first exchange-traded ETF that tracks the spot price. Eleven Bitcoin ETFs will begin trading for the first time when the stock market opens at 9:30 AM ET. Stocks are higher in premarket trading with the Nasdaq leading the way for the 4th consecutive day. this week. The Dow is trading above and below unchanged in pre-market trading.
Yields are lower. Oil is higher as tensions in the Red Sea continue to be a problem for shippers. In contrast, the weekly US inventory data showed surprise builds in Oil, gas and distillates as demand moves lower.
A snapshot of the markets as the North American session begins currently shows:
- Crude oil is trading up $1.46 or 2.05% at $72.83. At this time yesterday, the price was at $72.61
- Gold is trading up $8.78 or 0.43% at $2032.89. At this time yesterday, it was trading at $2031.14
- Silver is trading up $0.17 or 0.73% at $23.04. At this time yesterday, it was trading at $22.93
- Bitcoin traded at $47,448. At this time yesterday, the price was trading at $44,399.
In the premarket for US stocks, the major indices are trading next after trading mixed on Tuesday
- Dow Industrial Average futures are implying a gain of 14.27 points. Yesterday, the index rose 170.57 points or 0.45%
- S&P futures are implying a rise of 6.8 points. Yesterday, the index rose 26.95 points or 0.57%
- Nasdaq futures are implying a gain of 71 points. Yesterday, the index rose 111.94 points or 0.75%.
In the European equity markets, the major indices are all trading lower:
- German DAX, 0.31%. Yesterday, the index rose 0.01%
- France CAC 0.28%. Yesterday, the index fell 0.01%
- UK FTSE 100 -0.07%. Yesterday, the index fell -0.42%
- Spain's Ibex +0.44%. Yesterday, the index rose 0.07%
- Italy's FTSE MIB 0.20% (delayed by 10 minutes).
Shares in the Asian Pacific markets were mostly lower with Japan's Nikkei leading the way. The made a new 34-year high.
- Japan's Nikkei 225, rose 1.77%
- China's Shanghai composite index , 0.31%
- Hong Kong's Hang Seng index, 1.27%
- Australia S&P/ASX, 0.50%
Looking at the US debt market, yields are trading lower after an up-and-down session in yields yesterday:
- 2-year yield 4.337%, -3.4 basis points. Yesterday at this time, the yield was at 4.341%
- 5-year yield 3.933%, -4.8 basis points.. Yesterday at this time, the yield was at 3.945%
- 10-year yield 3.988% -4.2 basis points.. Yesterday at this time, the yield was at 3.996%
- 30-year yield 4.168% -3.2 basis points. Yesterday at this time, the yield was at 4.172%
- The 2-10 year spread is at -34.9 basis points. At this time yesterday, the spread was at -34.5 basis points
- The 2-30 year spread is at -17.0 basis points. At this time yesterday, the spread was at -16.7 basis points
In the European debt market, the benchmark 10-year yields are lower:
