Crude oil gives up earlier gains and settles down $0.67 at $104.69
Russia’s Lavrov: Most key customers agreed to gas-payment terms
Canada February federal budget balance year-to-date -$69.8B vs -$75.29B prior
Dallas Fed trimmed mean PCE 3.1% vs 4.0% prior
Baker Hughes oil rig count is up three on the week two to 352
European shares ending with gains for the trading day.
The first look at Q2 GDP from the Atlanta Fed tracker +1.9%
Is US housing headed for a U-turn? Here’s what homebuilders have to say
April final UMich consumer sentiment 65.2 vs 65.7 expected
Rising US yields not yet helping to lift the US dollar
US March PCE core +5.2% y/y vs +5.3% expected
US Q1 employment cost index +1.4% vs +1.1% expected
Canada February GDP 1.1% versus 0.8% estimate
The AUD is the strongest and the USD is the weakest as the NA session begins
ForexLive European FX news wrap: Dollar rally cools down
ECB’s Lane: Euro depreciation will be important factor in shaping ECB projections
As the clock ticks toward the Fed decision next Wednesday, the stocks are not taking it well. Of course, Amazon’s poor earnings after the close last night was a key catalyst today. Amazon shares are closing down over 14% on the day, and is also closing below its 200 week MA for the first time since 2009.
Apple’s earnings released yesterday were quite not as bad, but they warned about a revenue hit expected from China which acted as a reminder of the impact of the Covid lockdown for not only Apple, but others that rely on supply from that country.
Will supply constraints/supply shock ever go away and what will be the impact on inflation going forward?
Meanwhile the Fed will raise rates by 50 basis points on Wednesday, and have more or less telegraphed another 50 basis points and other tightenings into the year end as they try to break some of the inflation run higher and get their target rate toward the neutral rate of 2% to 2.5%.
In further anticipation, rates moved higher today which acted as another head wind to the stock market. The 30 year yield is back above the 3.00% level after dipping to 2.82% at the low for the week. The 2 year yield is also back near the high for the cycle at 2.787%. The 10 year yield is 5 basis points from its cycle high at 2.981%
US yields move higher today
For the month of April,
2 year yield moved from 2.33% t o 2.73% or +40 basis points
5 year yield moved from 2.46% to 2.96% or 50 basis points
10 year yield moved from 2.34% to 2.93% or +59 basis points
30 year yield moved from 2.45% to 3.00% or 55 basis points
For the stock market today, the major indices took it on the chin again after a reprieve yesterday:
Dow industrial average plunged -939.18 points or 2.77% to 32977.22
S&P index fell -155.57 points or -3.63% to 4131.92
NASDAQ index felt -536.80 points or -4.17% to 12334.65
Russell 2000 felt -53.84 points or -2.81% to 1864.10
For the week, the NASDAQ index was the worst performer losing close to 4% on the week as well. The numbers for the week are showing:
Dow industrial average, -2.47%
S&P index, -3.27%
NASDAQ index, -3.93%
Russell 2000, -4.07%
Stocks continue to prepare for higher rates, higher inflation, and potentially slower growth ahead as well.
In the forex today, the USD is ending mixed on the day with gains vs the NZD, AUD, CAD, and declines vs the GBP, JPY and EUR. The USD was near unchanged vs the CHF today.
The GBP was the strongest of the major today, while flow of funds exited the risk-off currencies. The NZD, AUD and CAD were the weakest of the majors.
The strongest to the weakest of the major currencies
Technically:EURUSD: The EURUSD is higher on the day but could not get above the falling 100 hour MA at 1.05907. The pair is trading at 1.0544 into the close after reaching a low at 1.04703 yesterday. That was the lowest level since January 2017. If the pair cannot muster a move above the 100 hour MA next week, a move toward the 2016 low at 1.0339. After that and the choir will be singing for parity. GBPUSD: The GBPUSD had a nice rebound today off the lowest level since July 2020 yesterday at 1.2410. The price moved above its falling 100 hour MA at 1.2577 and reached a high today of 1.2606, but has rotated back toward the 200 hour MA into the close. That MA at 1.2577 will be a barometer for the short term buyers and sellers next week.USDJPY: The USDJPY continued to make „20 year highs“ this week with the pair extending up to a high of 131.246. Today, however, saw the price move lower and test the old high from April 20 at 129.40. The price bounced near that level up to 129.73 into the close, but next week the 129.40 level will be a close barometer for the market. Stay above is more bullish. Move below and more downside probing can be expected. USDCAD: The USDCAD moved below its 100 hour MA today for the first time since April 22 near 1.2790 and extended lower to the 38.2% of the move up from the April 21 low at 1.2718. However, buyers leaned there and pushed the price straight back up and through the broken 100 hour MA again. The buying did not stop until reaching 1.2859. The price is at 1.2853 into the close. There is upside resistance from 1.28709 to 1.2900. A move above that area would have traders targeting the December 2021 high at 1.2963. Stay below and buyers may turn to sellers and push back toward the 100 day MA at 1.2678. NZDUSD: The NZDUSD is closing below the 50% midpoint of the move up from the 2020 low at 0.6465. The pair is closing at 0.6456. The pair is also near the lowest level since June 2020. A further move to the downside next week, will have trader targeting a lower trend line target at 0.6377. If the price can get and stay above the 50% there could be some corrective upside probing in the new week.