The economic calendar was light today with the less followed Dallas Fed manufactuing index the only release. It showed a fall to -8.3 from 14.1 last month. That was the lowest level going back to September 2024.
With stocks giving up their gains early in the day, the data helped to push the indices down even further.
- The NASDAQ index fell -248.55 points at session lows
- S&P index fell by -35.30 points at session lows
- Dow industrial average was down -84.35 points at session lows
The indices started to rebound. Some geopolitical news did give a modest bump with report from Axios that a US Ukraine minerals deal was near completion. Treasury Secretary Bessent said that were “on the 1 yard line” on the Ukraine mineral deal.
Then later the talk pivoted to the end of the Ukraine/Russian war with Trump saying that the end of the war could be within weeks. Shortly thereafter Russia’s Putin weighed in by saying that US/Ukraine rare earth metals deal was “none of his business”. He then expressed a willingness to cooperate with the U.S. on rare earth metals and aluminum, offering joint projects to both public and private American entities.
Regarding Ukraine, Putin acknowledged Trump’s efforts to improve the political situation and create conditions for Ukraine’s survival, emphasizing that Trump’s approach aligns more with Ukraine’s interests than Russia’s. However, he then described Trump’s stance as rational rather than emotional. Putin also stated that he has no objections to European participation in Ukraine negotiations, but criticized Europe for refusing contact with Russia. His
Looking ahead, Russia’s next discussions with the U.S. will primarily focus on bilateral relations, including the possibility of cutting defense budgets. Additionally, Putin suggested the potential for joint projects with the U.S. within Russia, signaling an interest in broader economic collaboration.
Wow…
However, what did not happen is the stocks rebounded on the positive news. The Dow is higher but the S&P and the Nasdaq indices remain in the red. Near the close, the Dow is up but the S&P and NASDAQ indices are still down on the day.
- Dow is up 17 point
- S&P is down -32 points
- Nasdaq index is down -244 points
In the US debt market, the yields moved lower helped by a very successful 2-year auction that saw the tail come in at -1.1 basis points (the WI level at the time of the auction vs the auction yield) with international buyers buying 85% of the auction and squeezing out domestic buyers and leaving less than 7% for the dealers.
Looking at the yield curve:
- 2-year yield 4.17%, -2.8 basis points
- 5-year yield 4.232%, -3.7 basis points
- 10-year yield 4.394%, -3.7 basis points
- 30-year 4.653%, -2.6 basis points
In the forex:
EURUSD: The EURUSD had an up and down day with the price low bouncing off the 200 hour MA. That MA comes in at 1.04567 currently and will be a barometer for buyers and sellers in the new trading day.The price is trading at 1.0466 as the day works toward the close.
USDJPY: The USDJPY fell below a swing area between 149.078 and 149.39. The low price reached 148.837 which was short of the December 3 swing low at 148.642. After bouncing higher and returning back into the swing area, there is a late day moved to the upside with the price currently trading at 149.66. Going into the new trading day, it would take a move back below the 149.078 level (the low of the swing area) to increase the bearish bias.
GBPUSD: The GBPUSD also had a up-and-down trading day with the low price in the US session stalling just above the broken 38.2% retracement of the move down from the September 2024 high. That level comes in at 1.26076 and will be a key barometer going into the new trading day for both buyers and sellers. Should