As the North American session begins, the NZD is the strongest and the CHF is the weakest. The flow of funds is more "risk on" today as markets have seen a bit of a reversal of the flow yesterday which saw stocks moving lower, yields a bit lower, crude oil lower - all on the back of omicron fears.
Today, stocks are higher, yields are higher, as is crude oil (European energy prices are rising with continued tension between Russia and Ukraine leading to slow supply). The USD is also mostly lower (it is higher vs the JPY and CHF) as the flight into the safety of the greenback subsides.
The Dems, on the back of the Manchin "thumbs down" over the weekend, are looking to punt more discussions on Biden's Build Back Better plan until after the new year. Manchin and Biden were said to have spoken after the "no" vote, with Machin remaining adamant about the accounting gimmicks that don't count spending plans for the full expected term (10 years).
Pres. Biden will address the nation today and outline plans for omicron risks including providing free testing and sending 500M tests to homes starting next month. The omicron variant now accounts for 70% of the new Covid cases in the US.
In other markets:
- Spot gold is trading up 6.34% at $1796.42
- Spot silver is trading up $0.43 or 1.97% at $22.69
- WTI crude oil futures are trading up $0.90 at $69.53
- The price of bitcoin has rebounded to $49,100. It traded as low as $45,570 yesterday.
In the premarket for US stocks, the major indices have rebounded from declines yesterday. The major indices have been down five the last six trading days:
- Dow industrial average is trading up 300 points after yesterday's -433.28 point decline
- S&P index is trading up 43 points after yesterday's 152.64 point decline
- NASDAQ index is up 181 points after yesterday's -188.74 point decline.
In the European equity markets, the major indices have also rebounded:
- German DAX, +1.2%
- France's CAC, +1.1%
- UK's FTSE 100 +1.0%
- Spain's Ibex, +1.3%
- Italy's FTSE MIB +1.2%
In the US debt market, yields across the yield curve are higher with the longer end moving up marginally higher than the shorter end:
In Europe, the benchmark 10 year yields are hall higher with UK yields up the most by 5.5 basis points. France yields are also back above 0.0% at 0.027%.
On the calendar today, Canada retail sales (+1.0% estimate) will be released at the bottom of the hour along with Canada new housing price index (+1.4% month on month). The US current account for the third quarter is expected to come in at $-205 billion versus $-190.3 million in the second quarter.
The U.S. Treasury will auction off 20 year bonds at 1 PM ET.
