The USD is tilting to the downside
As the North American session gets underway, the EUR is the strongest. Yesterday it was the weakest at the end of the day. The CHF is the weakest. The USD is tilting more to the downside despite another fall in stocks in premarket trading. The Nasdaq is down another -215 points in pre-market trading after the -350 point tumble yesterday. The Dow and S&P are also lower. Stanley Drunckenmiller is on CNBC currently and bashing Fed policy (“Fed in danger of waiting too long to raise rates”. “Current Fed policy totally inappropriate”. “Facts have changed, Fed should change”.), saying he is likely to be out of stocks by year end. He also said that Fed policy is risk the US dollar status as the reserve currency. Yields are modestly higher. Gold is higher as well and crude oil is lower. No race to the greenback or the CHF for safety today.
The ranges and changes snapshot is showing modest price action in the pairs vs the USD with the EURUSD range of 49 pips the largest while the USDCAD has only a 26 pip range on the day. The GBPUSD which ran higher yesterday after the Scottish election results, is higher again today but with a relatively modest trading range. The dollar is a little more bid on the back of the Drunkenmiller comments.
In other markets:
- Spot gold is up four dollars or 0.22% at $1840.14.
- Spot silver is up $0.16 or 0.59% at $27.46
- WTI crude oil futures are trading down $0.70 or -1.08% at $64.21
- Bitcoin is trading down $61 or -0.11% that $55,254.20. The high reach $56,451.70. The low extended to $54,511.48. Meanwhile Ethereum is up $61 or 1.56% two $3967.28. The price reached a all time high of $4200 yesterday and backed off.
In the premarket for US stocks:
- The Dow is trading down -228 points
- NASDAQ is trading down -252 points
- S&P index is down -47 points
In the European equity markets, the major indices also sharply lower:
- German DAX, -2.43%
- France’s CAC, -2.02%
- UK’s FTSE 100, -2.36%
- Italy’s FTSE MIB -1.93%
- Spain’s Ibex, -1.76%
US yields are mostly higher with yields of 0.2 to 0.3 basis points. Yesterday, the tenure yield moved up by about 2.1 basis points while the 30 year increase by 4.3 basis points. Today the refunding will get underway with the auction of $58 billion of three year notes at 1 PM ET. Tomorrow, the treasury will follow with $41 billion of 10 year notes and on Thursday the auction off $27 billion of 30 year bonds.
In the European debt market, the benchmark 10 year yields are trading sharply higher with Italy yields up by 5.9 basis points leading the way. The other yields are up 3.3 basis points or more.