January 28, 2025 at 09:09PM
US January consumer confidence 104.1 vs 105.6 expected
US December durable goods orders -2.2% vs +0.6% expected
US November CaseShiller house price index +4.3% vs +4.3% y/y expected
Richmond Fed composite index for January -4 versus -13 estimate
A rate cut is 99% priced in for Wednesday’s Bank of Canada meeting. Bigger questions loom
White House Press Secretary says the Feb 1 date for tariffs on Canada and Mexico remains
US treasury auctions offer 7-year notes at a high yield of 4.457%
Atlanta Fed GDPNow Q4 forecast rises to 3.2% from 3.0%
Canada planning covid-style stimulus if US enacts tariffs in bid to avoid early election
Markets:
Gold up $24 to $2764
US 10-year yield up 1 bps to 4.53%
WTI crude oil up $0.53 to $77.61
S&P 500 up 0.9%
USD leads, JPY lags
The FX market was subdued in North America trading as the moves were largely sideways as everyone is digesting the Nvidia wipeout on Monday and the implications for the AI trade, including the macro implications. The euro traded close to 1.0430 after falling in Asia while other pairs chopped mostly sideways.
The dollar was higher on the day across the board as it rebounded from the drop yesterday. Part of the drop was deflation worries — as in deflation in the cost of AI — but there was also some angst about US tech dominance. Today there was a bounce proving that BTFD is still the kneejerk reaction. Nvidia traded lower briefly after the open and broke yesterday’s lows but then turned around and finished up nearly 9%.
That helped the Nasdaq to a 2% gain but worries about some big earnings reports starting tomorrow may have capped the enthusiasm.
The oil market was bounced around by Libya headlines but ultimately finished higher.
Late in the day there was some buying in the Treasury market, in part due to a strong auction. That didn’t spread to the US dollar but it’s worth watching closely.
Tomorrow, the focus will shift to the Bank of Canada and Federal Reserve rate decisions and then it’s back to ‘tariff watch’.
This article was written by Adam Button at www.forexlive.com.