June 29, 2022

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The CAD is the strongest and the NZD is the weakest as the NA session begins

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USD is higher ahead of US CPI data 

As the North American session begins and traders prepare for the US CPI data, the CAD is the strongest, the NZD is the weakest. The USD is mostly higher with gains vs all the major currencies with the exception of the CAD.  The largest gains are versus the AUD and NZD as they suffer on the back of lower stocks/risk off sentiment. In Taiwan stock trading overnight, the Taiex index plunged as much as 9.8% intraday.  Is a precursor of what could happen elsewhere?  Still to be determined, but there are some jitters in equity trading.  The US CPI is expected to rise to 3.6% (highest since 2008) from 2.6% mainly on base effect changes (the MoM fell -0.7% a year ago). The MoM will be eyed with headline expected to rise 0.2% and ex food and energy up 0.3%.  Do the pipeline cost rises of late, start to make its way into the CPI and accelerate the move higher to something more than the base effect changes from the pandemic?  That is another question the market (and the Fed) is wrestling with now and will be going forward. 

USD is higher ahead of US CPI data 

The ranges and changes are weighed toward the USDCAD, AUDUSD and NZDUSD which have the largest trading ranges today so far. The other pairs (EURUSD, GBPUSD, USDJPY and USDCHF) have relatively modest ranges of 28 to 41 pips so far.  Those are well below the 22 day averages (around a month of trading). 

The ranges and changes for the major currency pairs
In other markets:

  • Spot gold is down $3.22 or -0.18% at $1834.26.
  • Spot silver is down $0.23 or -0.86% at $27.37
  • WTI crude oil futures are trading up $0.85 or 1.3% at $66.13
  • Bitcoin is trading down down $384 or -0.67% at $56,531.37. Ethereum continues is move to the upside with a gain of $133 or 3.22% at $4276.45. The high price reached $4372.35. That high represents a new all-time high level.

In the premarket for US stocks the futures are implying a lower opening across the board after yesterday’s second consecutive down day for the major indices:

  • The Dow is trading down -88 points. The index fell -473.66 point yesterday
  • NASDAQ is trading down -11.6 points. The index felt -36.33 points yesterday
  • S&P index is down -62 points. The index fell -12.43 point yesterday

In the European equity markets, the major indices unchanged to mostly higher across the country spectrum:

  • German DAX, +0.37%
  • France’s CAC, unchanged
  • UK’s FTSE 100, +0.6%
  • Italy’s FTSE MIB unchanged
  • Spain’s Ibex, unchanged

US yields are trading marginally lower with yields down up to -0.7 basis points. Today the refunding will continue with the auction of $41 billion of 10 year notes and on Thursday the treasury will auction off $27 billion of 30 year bonds.  Yesterday, the 3 year note was auctioned
with out any major surprises. Much of today’s path going into the auction will be determined by the CPI data at the bottom of the hour.

US yields are lower

In the European debt market, the benchmark 10 year yields are trading lower across the board.  During yields are getting closer to the 0.0% level. The high yield today reached -0.158%.  That was the highest level since March 2020, before moving back lower.

European yields are lower




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