The USD is little changed vs the major currencies with the EUR, JPY, GBP , CHF and CAD all within 0.10% of the unchanged level to start the US session. The AUD is the biggest mover with a 0.30% gain vs the USD and the NZD is higher by 0.19%. The markets are stymied by the fear of increased war tension (and its implications) with Israel’s bombing Hamas senior officials in Qatar (not warmly received by the international community), and Russia’s provocation with Poland that led to Poland shooting down Russian drones over their airspace.
Outside of the war room, at 8:30 AM, the Producer Price Index in the US will be released with expectations of 0.3% for both the headline and the ex-food and energy figures. The year-on-year levels are expected to come in at 3.3% and 3.5% respectively. Tomorrow, the US CPI data will be released giving the Fed its last looks at inflation before the meeting next week.
Despite the expectations of inflation being over 3%, the market is pricing in a 92% chance of a cut in September as focus turns toward increased weakness in the US labor market.
Yesterday, the BLS preliminary nonfarm payroll revisions for the March 2024 to March 2025 period, showed a bigger than expected decline of – 911K jobs. That data along with Friday’s nonfarm payroll report, shows a weaker jobs picture and has pushed yields lower, making the case for the Fed to cut easier.
In the video above, I kickstart the US session with a technical look at the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD. Each are little changed in up and down trading so far today.
In other markets as the US session begins, US yields are modestly higher:
- 2-year yield 3.55%, +0.8 basis points
- 5 year yield 3.6101%, +1.0 basis points
- 10 year yield 4.081%, +0 point basis points
- 30 year yield 4.731%, +1.4 basis points
In the US stock market, major indices are mixed with the Dow industrial average lower and the S&P and NASDAQ indices higher. Yesterday both the S&P and NASDAQ indices closed at record levels.
Oracle shares surged overnight and are higher by 31% in premarket trading after its latest earnings report, despite a slight miss on headline numbers—EPS of $1.47 (vs. $1.48 expected) and revenue of $14.9B (vs. $15.0B expected).
The rally was fueled not by the quarter’s results but by the company’s explosive outlook: its Remaining Performance Obligations (RPO) soared to $455B, up from $138B just a quarter ago, with expectations it could soon surpass $500B. Oracle also raised its forecast for cloud infrastructure revenue to $18B for the year and projected growth to $144B over four years, supported by massive multi-year AI contracts with OpenAI, Meta, and NVIDIA. Multi-cloud database services grew by more than 1,500%, highlighting accelerating demand. These figures signal a transformation of Oracle from a legacy software firm into a central player in the AI and cloud infrastructure space, driving a nearly $200B jump in market value overnight as investors embraced its role in powering the AI boom.
Shares of Nvidia are being tracking higher with a gain of 2.83%, and AMD shares are up 4.05%. Broadcom which announced solid earnings and expectations last week are up 2.53% after losing -2.6% in a corrective move lower yesterday.
Apple shares are down by -0.71% after falling -1.48% yesterday despite the new product announcements.
A snapshot of the major indices shows:
- Dow industrial average -51 points
- S&P index up 26 points
- NASDAQ index up 85 points
Crude oil is trading higher by $0.82 at $63.46. Gold is up by $25.86 or 0.71% at $3649.44. Yesterday, a new all-time high was reached $3674.78 before moving back to the downside and closing lower on the day. Bitcoin is trading up $1111 at $112,648
