At the start of the North American session, the CAD is the strongest and the JPY is the weakest of the major currencies. The USD is slightly weaker ahead of President Powell’s reconfirmation testimony to the Senate Banking Committee. Mester and George from the Fed will also speak. The market will be interested in hearing about balance sheet cuts. Do they favor a slow runoff or a more aggressive quantitative tightening?
The US Treasury will auction three-year notes at 1 p.m. They will auction 10- and 30-year-old shows on Wednesday and Thursday. The US CPI will also be released on Wednesday, with the CPI on Thursday. US retail sales will be released on Friday with earnings from JP Morgan, Citigroup, BlackRock and Wells Fargo to kick off the earnings season.
US stocks are higher after wiping out most of the Dow Jones and S&P losses at the close. The NASDAQ index closed higher after falling more than 400 points during the day (up 6.93 points).
US yields are mixed early in the session with the 10-year down 1.76% (down about two basis points). The two-year yield is however up 2.5 basis points. The market begins to set prices and four tightening in 2022, the first taking place in March.
A market overview currently shows:
- Spot gold is trading up $ 7.13 or 0.40% to $ 1,807.63
- Cash is up $ 0.18 or 0.87% to $ 22.64
- WTI Crude Oil Futures Trade Up $ 1.20 to $ 79.44
- Bitcoin price is trading stable at $ 41,847.39
Looking at the pre-market for US stocks, futures contracts imply higher levels for major indices:
- The Dow Jones is up 31 points after falling 162.79 points yesterday
- The S&P index is up nine points
- The NASDAQ index is up 42 points
On the European equity markets, the major indices are also rebounding today:
- German DAX, + 1.1%
- CAC France, + 1.1%
- British FTSE 100, + 0.65%
- Ibex from Spain, + 0.8%
- Italian FTSE MIB + 0.9%
In the US debt market, rates are mixed with the shortest and higher in the lower long term (flatter yield curve). Year 2 is at its highest since February 2020:
On the European debt market, yields are mostly lower with the exception of Italy: