U.S treasuries fell across the curve yesterday as a large amount of corporate and treasury supply is reportedly scheduled for sale this week | 24/01/2023

It was positive day for U.S equities overnight with the tech heavy NASDAQ leading the way. Marquee names like Microsoft who announced a mega investment in AI products as well as Tesla are set to report earnings results in the coming days. Spotify rallied after announcing it’s cutting 6% of its workforce meanwhile Ford motor group is slashing 3,200 jobs in Europe. The S&P 500 rose 1.2%, the Dow jones was 0.75% higher while the NASDAQ gained 2%. The Chinese market is shut all week for Lunar new year, futures however across Asia are trading higher this morning.

U.S treasuries fell across the curve yesterday as a large amount of corporate and treasury supply is reportedly scheduled for sale this week. The bond market is also wary of writing down inflation risk to far yet with a lot of variables still at play in the coming months. The U.S 10-year yield was up 3.7bps to 3.52% and the 2-year was up 5.7bps to 4.23%. Australian Government bond yields have also opened 2bps higher this morning ahead of onshore inflation data tomorrow.

Commodities had a flat day of trade in what has continued to be a good start to the year, WTI crude was unchanged at $81.68/barrel with consensus being it will continue to rise over the next 6 months. Copper managed a 0.15% gain to sit at $4.25/lb, Gold rose 0.25% to $1,931 and iron ore was flat at $125/t.

The USD held steady in yesterday’s session which struggled for direction. The DXY index has been hovering around the 102 level for the last week and is eagerly awaiting the Fed’s rate decision next week to drive the next phase or price action. The AUD continues to outperform off the back of solid commodity prices as it looks to establish itself above 0.7000, it gained 0.9% to close at 0.7026. Meanwhile the NZD made some inroads into the USD with a 0.6% rise to 0.6480, the EUR was up 0.3% to 1.0871 and the Dollar/Yen increased 0.7% to 130.65.

What to watch today:

AUD NAB Business Confidence 11:30am

EUR Manufacturing PMI (French) 7:15pm (German) 7:30pm

GBP Manufacturing PMI 8:30pm

USD PMI’s 1:45pm

 

Daily Market Analytics by,

Lenny Hayes

Chief Technical Officer