The AUD is the strongest and the EUR is the weakest because the NA session begins

As the North American session begins, the AUD is the strongest and the EUR is the weakest. The USD is mostly higher with the gains vs the EUR of 0.50% being most of the gain. The USD is lower vs the AUD (by -0.17%).

It is less about today and more about the week ahead, and partly about the stronger US jobs report from Friday.

The Fed is now expected to cut 1-2 cuts between now and the end of the year with cuts either starting in September – if two cuts – or one maybe not until December.

Overnight, Japan did release final GDP (3.4% vs 3.6%), but China was on holiday. France’s Macron desolved parliament and called a snap election after European elections shifted with far-right parties doing better. Macron’s position is not at risk as President, but parliamentary power is at stake. UK and now France will be going to the polls with shifts in power on the table.

This week will be highlighted by the FOMC rate decision on Wednesday. The Federal Reserve is expected to keep rates unchanged. Attention will likely focus on any hints about the Fed’s future rate outlook. The updated dot plot, a key indicator of policymakers’ rate expectations, is likely to be 1-2 cuts, a reduction from March’s projection of three cuts. A number of Fed officials have expressed the need for more concrete evidence of sustained inflation cooling towards the 2% target before implementing rate cuts. Although price increases have moderated since the aggressive rate hikes that began in 2022, they are still exceed 2%.

The US CPI data will be released on Wednesday. The expectations are for Core CPI to rise by at 0.3% (no change from last month) and the headline to rise 0.1% (down from +0.3%), but the YoY is still expected to remain at 3.4%.

The Bank of Japan will announce its interest rate decision on Friday.

Yields are higher at the start of the US session (and after sharp gains on Friday after the US jobs report). Although yields were lower on the week, the sharp gains on Friday, retraced much of the declines for the week.

US stocks are modestly lower. At the risk of being repetitive, the shares of Nvidia will trade at an adjusted stock price due to the 10:1 stock split.

A snapshot of the other markets as the North American session begins shows

• Crude oil is trading up $0.64 or 0.83% at $76.16. At this time Friday, the price was at $76.02.
• Gold is trading up $11.68 or 0.51% at $2305.54 (after Friday’s $-81 plunge). At this time Friday, the price was at $2335.57.
• Silver is trading up $0.62 or 2.12% at $29.78. On Friday, their employers tumbled $-2.13. At this time on Friday, the price was trading at $30.33 before continuing its decline.
• Bitcoin currently trades at $69,388. At this time Friday, the price was trading at $71,790
• Ethereum is trading at $3670.50. At this time Friday, the price trading at $3830.

In the premarket, the snapshot of the major indices are marginally higher.

• Dow Industrial Average futures are implying a decline of -40.25 points. Friday, the Dow Industrial Average fell 87.18 points or -0.23% at 38799.00.
• S&P futures are implying a decline of -4.99 points . Friday, the S&P index fell -5.97 points or -0.11% at 5346.90
• Nasdaq futures are implying a decline of -13.75 points. Friday, NASDAQ index fell -39.99 points or -0.23% at 17133.13

European stock indices are trading lower today in the US morning snapshot:

• German DAX, -0.46%
• France CAC -1.54%
• UK FTSE 100, -0.20%
• Spain’s Ibex, -0.39%
• Italy’s FTSE MIB, -0.44% (delayed 10 minutes).

Shares in the Asian Pacific markets were mostly closed

• Japan’s Nikkei 225, +0.92%
• China’s Shanghai Composite Index, closed
• Hong Kong’s Hang Seng index, closed
• Australia S&P/ASX index, closed

Looking at the US debt market, yields are trading higher after Friday’s sharp rise:

• 2-year yield 4.878%, +0.8 basis points. At this time Friday, the yield was at 4.746%
• 5-year yield 4.469%, +1.8 basis points. At this time Friday, the yield was at 4.314%
• 10-year yield 4.453%, +2.5 basis points at this time Friday, the yield was at 4.290%
• 30-year yield 4.579%, +3.0 basis points. At this time Friday, the yield was at 4.444%

Looking at the treasury yield curve the spreads are moving modestly higher:

• The 2-10 year spread is at -42.5 basis points. At this time Friday, the spread was at -44.5 basis points.
• The 2-30 year spread is at -29.7 basis points. At this time Friday, the spread was at -30.0 basis points.

In the European debt market, yields are higher: