The NZD is the strongest and the EUR is the weakest as the North American session begins. Today in the US, the week will end with the core and headline PCE inflation measure (along with personal income and personal spending) being released. The Core PCE is expected to dip to 4.9% from 5.2% last month. The headline is expected to remain steady at 6.6%. The MoM are expected to come in at 0.8% for the headline and 0.3% for the core measure. How that data comes out will likely be the influence for the end of year trading (for the USD, stocks, bonds). US trade balance and inventories will also be released at 8:30 AM, but focus will be on the inflation measures.
With the Nasdaq and S&P up for 3 of the 4 days so far this week (Nasdaq is up 3.4%, S&P is up 4% this week), and the Dow up 4 for 4 (up 4.4% this week), the major indices are on target to close higher this week breaking 7 week declines for the Nasdaq and S&P and 8 weeks for the Dow. The major indices are little changed/mixed in pre-market trading. European shares are higher.
In the US debt market, yields are lower to start the day and lower for the week. The 10 year yield is down from 2.785 last Friday to 2.72% currently. The 10 year yields peaked on May 9 at 3.203%. The expectations for a third 50 basis point hike in September was pared back by the markets as housing showed major cracks this week. Both pending home sales and new home sales reacting sharply to the downside as surging home prices and mortgage rates, started to impact demand.
A snapshot of the markets are showing:
- Spot gold is trading up $10.19 helped by the falling US dollar. That’s down -0.55% at $1860.64
- Spot silver is up $0.37 or 1.71% at $22.36
- WTI crude oil is trading down -$0.80 at $113.27
- Bitcoin is trading lower at $28,892.93. Ethereum is trading down nearly 3% at $1772.40 as the so-called “Merge” which will see the network transition from the ‘proof of work’ mechanism for mining ‘to proof of stake’ is not expected to be completed before August.
In the premarket for US stocks, the futures markets are implying a little changed market
- Dow is trading above and below unchanged. It is currently up 18.81 points after yesterday’s 516.91 point rise
- S&P index is up 9 points after rising 79.11 points yesterday
- NASDAQ index is up up 60 points after rising 305.91 points yesterday
In Europe: the majorindicesare trading higher
- German DAX is up 0.7%
- France’s CAC is up 0.8%
- UK’s FTSE 100 is up up 0.22%
- Spain’s Ibex is up 0.24%
- Italy’s FTSE MIB is near unchanged
The US debt market this morning, yields are trading lower
In the European debt market the benchmark 10 year yields are also moving lower
Remember, the US will be off on Monday in observance of Memorial Day. That may impact end of day activity as traders head for the exits early.