The JPY is the strongest and the USD is the weakest as the NA session begins

Technical Analysis

The strongest to the weakest of the major currencies

The trend from yesterday has continued today with the JPY the strongest of the major currencies . The USD is the weakest.

The US CPI was weaker than expected yesterday (0.4% vs 0.6% est. for headline, and 0.3% vs 0.5% est. for the core), prompting a tumble in the US dollar and yields and a surge in US stocks. That led to a multi decade single day move lower of around -3.5% in the USDJPY and the pair is down another -1% today in early US trading.

The greenback lost -3.13% vs the GBP as well (the GBP was the second strongest currency yesterday), and the USD is down -0.4% vs the GBP today. In the UK the GDP fell -0.2% vs expectations of -0.5%. The Bank of England warned that the UK economy is set to enter a two-year recession if interest rates continued to rise to combat inflation. The greenback is down -0.77 vs the EUR and -0.75% vs the CHF today.

In China, they eased covid rules, cutting the quarantine time for visitors inbound to the country from 10 days to 8 days. That led to a sharp rise in Hang Seng which rose by 7.7%. The Shanghai index rose by about 1.7%. The yuan meanwhile rose for the 2nd consecutive day vs the USD.

FTX situation is getting more tenuous as regulators freeze assets. In the Bahamas the Securities Commission has applied for the company to be placed in “provisional liquidation”. The company is facing a shortfall of $8 to $10B as a result of the funneling of funds to the affiliated hedge fund Alameda to cover losses there.

The US is on a semi-holiday in observance of Veterans Day. The US banks and federal offices are closed, which means the US bond market is shuttered. However, the US stock markets are open today.

The only economic release will be the private Univ. of Michigan Consumer confidence which is expected expected to dip to 59.5 in the preliminary report for November vs 59.8 last month. The current conditions is expected at 64.0 vs 65.3 last month and the expectations are at 56.0 vs 56.2 last month. The 1 year inflation last month came in at 5.1% and the 5 year at 2.9%. Any dip in the inflation would be welcomed given the CPI reaction yesterday. Traders and investors are hopeful for a continuation going forward (as are central bankers in their heart of hearts).

In other markets:

  • spot gold is trading up $3.70 or 0.21% at $1759.32.
  • Spot silver is trading down $0.21 -1% at $21.44
  • WTI crude oil is up sharply at $89.27 up 3.33% helped by the declining dollar and hopes of the continuation of Covid restrictions in China
  • Bitcoin is trading down 3 or $19 or -121% and $17,274. The low price reached $15,632 at its lows

in the premarket for US stocks, the major indices are higher:

  • Dow industrial average is up 146 points after yesterdays 1201.43 point gain yesterday
  • S&P index is up 18 points after yesterdays 207.82 point rise
  • NASDAQ index is up 59 points after yesterdays 760.97 point rise

In the European equity market, the major indices are mostly higher:

  • German DAX is up 0.36%
  • France’s CAC is up 0.53%
  • UK’s FTSE 100 is down -0.3%
  • Spain’s Ibex is up 0.11%
  • Italy’s FTSE MIB is up 0.5%,

In the European debt market, the benchmark 10 year yields are higher reversing declines from yesterday.

European benchmark 10 year yields are higher

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