The JPY is the strongest and the EUR is the weakest as the North American session begins

TGIF.

The JPY is the strongest and the EUR is the weakest as the North American session begins. The USD is mostly but moderately lower. The greenback is only higher vs the EUR and GBP. Yesterday, the EURUSD moved higher on follow through buying after the FOMC rate decision. The ECB did not thrill to the dovish side – nor did the BOE. The flash PMI data in Europe today was a little weaker than expectations with a lot of numbers remaining below the 50 line indicative of contracting manufacturing and services sectors. The weaker numbers helped to push the EURUSD lower. ECBs Villeroy added to the bearish tilt by saying the next policy move should be lowering rates barring any surprised. There was no discussion of rate cuts at the meeting yesterday for the ECB. The BOE story was more bearish with 3 members voting for a hike of 25 basis points.

Key event today: NY Fed Pres. John Williams will be interviewed on CNBC at around 8:30 AM ET. What is the Fed member thoughts of the market moves after the FOMC rate decision and more dovish comments from Fed Chair Powell. .

US stocks are higher for the seventh consecutive day. The Dow Industrial Average closed at a record level yesterday led by Caterpillar, an interest-rate sensitive stock, rising $17.20 or 6.42%. On the other end of the spectrum, the riskier small-cap stocks rose 53.0 points or 2.72% to 2000.51. Those stocks also tend to benefit from lower interest rates. Cathie Wood’s Ark Innovation ETF – another measure of small-cap high-risk stocks – rose $1.85 or 3.69% (it is up 0.79% in premarket trading today). Finally, Costco shares are up $11.02. Earnings were released yesterday and came in better than expected. They also declared a one-time $15 dividend.

US interest rates continue their move to the downside today. 10-year yield’s this week are lower by -33 basis points.

Crude oil is trading higher on pace for its first gain after eight straight weeks of declines.

A snapshot of the markets to kickstart the North American session shows:

• Crude oil is trading up $0.88 or 1.22% at $72.45. At this time yesterday, the price was at $70.76. For the week, crude oil is up $1.21
• Spot gold is trading up $7.61 or 0.3% at $2043.85. At this time yesterday, the price is at $2037.87. For the week, the price is up $39.59 as it reacts to the lower dollar and lower rates.
• Spot silver trading up nine cents or 0.36% at $24.24. At this time yesterday, the price was at $24.09. For the week the price is up $1.26
• Bitcoin is trading at $42,741. At this time yesterday, the price was trading at $43,181. For the week the price is down -$1044

In the US stock market, the major indices futures imply a higher opening after closing higher across-the-board yesterday. All three indices closed yesterday at the highest levels for 2023 (once again). Shares in the major indices are up for 6 consecutive days:

• Dow Industrial Average futures are implying a gain of 97 points. Yesterday, the Dow Industrial Average rose 158.11 points or 0.43% at 372482.36. The Dow Industrial Average closed yesterday at an all-time record high. For the week, the index is up 2.76%..
• S&P index futures are implying a gain of 9.7 points. Yesterday, the S&P index rose 12.46 points or 0.26% at 4719.54. For the week, the index is up 2.50%.
• NASDAQ index futures are implying a gain of 41 points. Yesterday, the Nasdaq Index rose 27.59 points or 0.19% at 14761.56. For the week, the index is up 2.48%

In the European equity markets, the major indices are trading higher following the US stock tire:

• German DAX, +0.34. For the trading week, the index is on pace for a gain of 0.28%
• France’s CAC, +0.56%. For the trading week, the index is up 1.21%.
• UK’s FTSE 100, -0.55%. For the week, the index is up 0.68%..
• Spain’s Ibex, -0.88%. For the week, the index is down -1.42%
• Italy’s FTSE MIB,+0.47% (10 minute delay).

In the Asia Pacific market, major indices closed mixed

• Japan’s Nikkei index, was a 0.87%. For the week, the index rose 2.05%..
• China’s Shanghai Composite Index, -0.56%. For the week, the index the index fell -0.90%.
• Hong Kong’s Hang Seng index, +2.38%. For the week, the index rose 2.80%.
• Australia’s S&P/ASX index, +0.88%. For the week, the index is up 3.40%

In the US debt market, yields are trading lower. Yields are down sharply.:

• US 2Y T-NOTE: 4.371% -2.8 basis points. At this time yesterday, the yield was at 4.333%. For the week, the yield is down -35.2 basis points
• US 5Y T-NOTE: 3.874% -3.6 basis points. At this time yesterday, the yield was at 3.885%. For the week the yield is down -37.0 basis points
• US 10Y T-NOTE: 3.899% -3.0 basis points. At this time yesterday, the yield was at 3.946%. For the week, the yield is down -33 basis points
• US 30Y BOND: 4.022%, -2.5 basis points. At this time yesterday, the yield was at 4.111%. For the week, the yield is down -27.8 basis points
• 2 – 10-year spread is trading at -47.3 basis points. At this time yesterday, the spread was at -39.5 basis points
• 2 – 30 year spread is trading at -34.2 basis points. At this time yesterday, the spread was at -23.1 basis points

In the European debt market, benchmark 10-year yields are trading lower.