US Stocks Lower on First Trading Day – Dow drops 0.6%
US Stocks ended their first trading day of the week lower yesterday as more mixed earnings reports from the major banks and comments from Fed members pressured markets. Of the three major indices the Dow took the biggest hit on the day, dropping 0.62% followed by the S&P which lost 0.37% and the Nasdaq which finished 0.19% in the red. Federal Reserve Governor Christopher Waller advised that he didn’t think the Fed should be in a rush to lower rates which saw the dollar rally strongly, gaining 0.95% on the Dxy. US treasury yields pushed higher on the back of the comments, the benchmark 10-year back above 4% to close at 4.07% with the 2-year pushing back up to 4.21%. Oil and Gold both lost ground in line with the dollar appreciation, WTI now at $71.80 and spot gold off 1.3% to $2,028 an ounce.
Dollar Breaks into Fresh Ground – Up 1%
The greenback broke into fresh ground in trading yesterday as, yet another fed official advised that the market may be overpricing the number and pace of rate cuts in 2024. The move actually kicked off well ahead of the US session with the Aussie taking a hit during the Asian session as it punched through strong options interest at 0.6650 before heading relatively swiftly to 66 cents. Cable picked up the reins early in the European day when Average Earnings numbers came out lower than expected and so it was not totally a dollar move across the sessions. These moves added to dollar strength across the board before the icing on the cake came with Fed Governor Wallers comments. Traders are now looking for further technical moves in the sessions ahead with Aussie sitting on key 200-day moving average support and both Cable and Euro not far from their equivalent levels either.
Data Events Ahead for all Sessions Today
It looks set to be a busy day for traders today after the US markets kicked into action yesterday and currencies in particular got on the move. The Asian session sees a heavy data hit out of China with the release of Industrial Production, GDP, and Retail Sales numbers all at the same time. This is then followed by another big data event in the UK, early in the London session, this time with the crucial CPI numbers release. The New York session has the US Retail Sales data release along with scheduled speeches from FOMC members Barr and Bowman, and once again investors will continue to monitor any fresh updates from Davos as the day progresses.
