December 4, 2022

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The EUR is the strongest and the AUD is the weakest as NA traders enter for the day

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The USD is higher but action is confined

The EUR is the strongest and the AUD is the weakest as NA traders enter for the day. The USD is stronger and just behind the EUR for the strongest currency. However, the trading is confined. The biggest movers are the AUDUSD and NZDUSD with less than a 0.20% move (not a lot).  The Producer Price index final demand data will be released today a day after the CPI came in about as expected (0.6% and 0.5% for the headline and core expected).  The weekly jobless claims data will also be released (last week 385K).  The US treasury will auction 30 year bonds at 1 PM after an A+ auction in the 10 year that saw huge demand from overseas investors.   

The USD is higher but action is confined

Looking at the ranges for the major currency pairs, all but the EURGBP has low to high ranges that are less than 50% of what has been the normal for a day over the last month of trading.  Summer doldrums?  There is room to roam.  

 

T ranges and changeshe

In other markets:

  • Spot gold is up one dollar and $0.20 or 0.06% at $1751.31
  • spot silver is down $0.16 and -0.70% at $23.38
  • WTI crude oil futures are down $0.53 or -0.77% at $68.79
  • Bitcoin is down $690 at $44,850.83 

In the premarket for US stocks, the major indices are modestly higher. Yesterday the S&P and Dow closed at record levels, while the NASDAQ index was down for the second consecutive day

  •  Dow +25 points
  • NASDAQ +9 points
  • S&P index +1.5 points

in the European equity markets, the major indices are continuing their move to the upside (sans the UK FTSE 100).

  • German DAX, +0.4%
  • France’s CAC, +0.3%
  • UK’s FTSE 100, -0.2%
  • Spain’s Ibex, unchanged
  • Italy’s FTSE MIB, +0.3%

In the US treasury market, the benchmark yields are mixed with the 30 year higher ahead of its auction at 1 PM ET.  Yesterday the U.S. Treasury auctioned off $41 billion of 10 year notes without a hitch. In fact, it was one of the strongest auctions I have seen in a long while.   Strong overseas demand carried the issue.   If overseas investors think the dollar will rise (good bet) and the yield is higher than European issues, I guess it makes a lot of sense. 

US yields are mixed The benchmark European 10 year yields show:
  • Germany, -0.453%, +0.5 basis points
  • France -0.119%, +0.2 basis point
  • UK 0.604%, +3.1 basis points
  • Spain 0.234%, -1.1 basis points
  • Italy 0.554%, -1.7 basis points

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