Christmas Eve in the US will include a shorten day in the US. The stocks will close early at 1 PM, the US bond market will close at 2 PM.
The USD is mixed vs the major currencies:
- EUR +0.12%
- JPY -0.04%
- GBP-0.15%
- CHF +0.18%
- CAD +0.32%
- AUD +0.27%
- NZD +0.23%
US stocks are mixed after rising yesterday (Dow up 0.16%, S&P up 0.73% and the Nasdaq up 0.98%). Today, the Dow is marginally lower in the snapshot (-25 points), the S&P is up by 6.05 points and the Nasdaq is up 43 points.
In the US debt market, the yields are also marginally changed:
- 2-year 4.353%, up 0.3 bps
- 5-year 4.454%, up 0.9 bps
- 10-year 4.606% up 0.8 bps
- 30-year 4.796%, up 1.3 bps
Overnight, the Reserve Bank of Australia (RBA) minutes were released. They noted that its policy remains “sufficiently restrictive” to address inflation concerns. While the board gained confidence that inflation had eased since its last meeting, risks persisted. Key considerations included maintaining tolerance for inflation targets without prematurely easing policies. The board acknowledged that if economic growth strengthened, a prolonged delay in rate adjustments might be necessary. While wage growth was slower than anticipated, other labor market indicators showed resilience. Updated forecasts for inflation and growth would be published in February, and the RBA stressed the need for clarity on potential impacts from international factors like U.S. policies.
Japan’s Finance Minister Kato emphasized the importance of ensuring currency stability to reflect economic fundamentals, particularly in light of recent sharp foreign exchange movements. He stated that the government would maintain close communication with overseas authorities on forex policies and was prepared to take decisive action against excessive volatility.
ECB’s Vujčić reiterated that interest rate adjustments would continue as long as data align with projections, emphasizing the central bank’s data-dependent approach. However, he refrained from specifying the exact level at which the ECB might halt rate hikes, underscoring the uncertainty tied to future economic conditions.
The Richmond Fed index will be released at 10 AM ET with expectation at -10 vs -14 last month. The US treasury will auction 5 year notes at 1 PM. Yesterday the treasury auctioned 2 year notes with a 0.1 bp tail, and a bid to cover at 2.73X vs 2.68X 6-month average. Domestic buyers were very light at 6.7% vs 19.5% average, but the international buyers showed up taking 82.1% well above the average of 68.1%. Needless to say, Christmas eve might be sloppy, but they do it every year..
Technically:
- EURUSD: The EURUSD is waffling and has allowed the 100 hour MA to move lower and has caught up to the midpoint of the EURUSD’s range since 2022 low.That level comes in at 1.04053. The 100 hour MA comes in at 1.0403 currently. That level will be a short term barometer for buyers and sellers in the short term. Move above is more bullish (a start with work to do) . Stay below and the sellers are in firm control
- USDJPY: The USDJPY were not really impacted by the finance minister’s comments (see above). Like the EURUSD, the pair is waffling in a narrow trading range today. The current price is at 157.12. The rising 100-hour MA is at 156.42 but risiing quickly. Over time, with a sideways market, that MA will be in play and as such would represent a short term barometer for buyers and sellers. Right, not the buyers are still in firm control. Other levels to be aware is the high from November at 156.739 and below the 100 hour MA, 155.88 which is near the high from November 20 and near the low from yesterday (at 155.94).
- GBPUSD. The GBPUSD is stretching higher and is moving closer to the falling 100-hour MA at 1.2563 (which is near a modest swing level too). Get above and a swing area between 1.2596 and 1.26147 would be targeted followed by the 200-hour MA at 1.26201.