The USD is mostly higher
A corrective day in stocks means a reversal of the risk on in forex. The AUD and NZD have been leading the way to the upside as S&P index finally got to the end of December 2019 levels at the close yesterday. The Nasdaq index closed at record high levels. So why not correct today and reverse the fortunes of the AUD and the NZD in the process. The CHF and the JPY are the beneficiary on “flight to safety” flows. The USD is mostly higher with gains vs GBP, CAD, AUD and NZD. The EURUSD is near unchanged and the JPY and CHF are lower.
The ranges and changes show some decent ranges but the off the extremes with the exception of the USDCHF (which is trading near session lows). The JPY crosses (which tend to get hit when risk off is the theme) are lower but they are off lowest levels for the day.
In other markets:
- Spot gold is trading up $6.61 or 0.39% at $1705.11
- WTI crude oil futures are trading down $0.14 -0.34% at $38.05
In the premarket for the US stocks, the futures are and implying a lower opening:
- Dow is down -286 points
- S&P is down -29 points
- Nasdaq is down -48 points
In the European equity markets the major indices are trading lower.
- German DAX, -1.5%
- France’s CAC, -1.3%
- UK FTSE, -1.6%
- Spain’s Ibex, -1.8%
- Italy’s FTSE MIB, -1.6%
In the US debt market the yields are moving lower in reaction to the other risk off flows (and flight to safety in treasuries). The yield curve is also flatter with the 2-10 year spread narrowing to 61.5 basis points from 64.9 at the close yesterday.
In the European debt market, benchmark 10 year yields are trading mixed with the Germany and UK yields down marginally. Investors are shunning the Italian yields with a 4.8 basis point gain.