As the NA session begins the GBP is the strongest and the NZD is the weakest

The forex market is off to a slow start as many countries are on holiday in Europe. Canada is also on holiday today. The GBP is the strongest and the NZD the weakest as the North American session begins. Having said that the major currencies are all scrunched together with the USD the 2nd strongest but with most of the changes on the day in the morning snapshot within 0.09% of the closing level on Friday (the NZDUSD is the largest change at 0.23%). The lack of activity is evident in the ranges of the major currency pair vs the 22 day averages (about a month of trading).

  • EURUSD 23 pips vs 53 pip average
  • USDJPY 45 pips vs 160 pip average (thanks to intervention)
  • GBPUSD 26 pips vs 76 pip average
  • USDCHF 23 pips vs 55 pip average
  • USDCAD 20 pips vs 64 pip average
  • AUDUSD 26 pips vs 55 pip average
  • NZDUSD 23 pips vs 49 pip average

That is not a lot of price action for the 1st day of the trading week

Speaking of the trading week, the economic calendar today is void of data but Fed speakers will be chirping:

  • 8:45am: USD: FOMC Member Bostic Speaks
  • 9:00am: USD: FOMC Member Waller Speaks
  • 9:00am: USD: FOMC Member Barr Speaks
  • 10:30pm: USD: FOMC Member Jefferson Speaks,
  • 2:00pm:USD: FOMC Member Mester Speaks

This week the major event calendar are highlighted by the following:

Tue, May 21

  • 8:30am:
    • CAD: CPI m/m – Forecast: 0.5%, Previous: 0.6%
    • CAD: Median CPI y/y – Forecast: 2.7%, Previous: 2.8%
    • CAD: Trimmed CPI y/y – Forecast: 2.9%, Previous: 3.1%
  • 1:00pm:
    • GBP: BOE Gov Bailey Speaks

Wed, May 22

  • 10:00pm:
    • NZD: Official Cash Rate – Forecast: 5.50%, Previous: (not provided)
    • NZD: RBNZ Monetary Policy Statement
    • NZD: RBNZ Rate Statement
  • 2:00am:
    • GBP: CPI y/y – Forecast: 2.1%, Previous: 3.2%
  • 2:00pm:
    • USD: FOMC Meeting Minutes

Thu, May 23

  • 3:15am:
    • EUR: French Flash Manufacturing PMI – Forecast: 45.8, Previous: 45.3
    • EUR: French Flash Services PMI – Forecast: 51.8, Previous: 51.34
  • 3:30am:
    • EUR: German Flash Manufacturing PMI – Forecast: 43.2, Previous:42.5
    • EUR: German Flash Services PMI – Forecast: 53.5, Previous: 53.2
  • 4:30am:
    • GBP: Flash Manufacturing PMI – Forecast: 49.5, Previous: 49.1
    • GBP: Flash Services PMI – Forecast: 54.7, Previous: 55.0
  • 8:30am:
    • USD: Unemployment Claims – Forecast: 221K, Previous: 222K
  • 9:45am:
    • USD: Flash Manufacturing PMI – Forecast: 50.1, Previous: 50.0
    • USD: Flash Services PMI – Forecast: 51.5, Previous: 51.3

Fri, May 24


  • USD: Revised UoM Consumer Sentiment – Forecast: 67.7, Previous: 67.


  • GBP: Retail Sales m/m – Forecast: -0.6%, Previous: 0.0%

Nvidia will announce its earnings on Wednesday after the close and may be the biggest market-moving event this week.

In central bank news today, the Bank of Japan (BoJ) survey revealed that many firms are struggling to hire sufficient workers if they restrict wages, prompting an increasing number of companies to pass on rising labor costs to their sales prices. Companies, regardless of size and sector, expressed a preference for an economic environment where both wages and prices rise, as it benefits their business more than one where these factors remain stagnant. BoJ’s monetary easing policies have supported capital expenditures and corporate activities by maintaining low borrowing costs and improving fund availability. However, some firms reported challenges in hiring and increased price competition as side effects of these policies. Additionally, large manufacturers identified foreign exchange stability as their primary concern with BoJ’s monetary policy. Inflation is rumbling under the surface.

ECB’s Martins Kazaks emphasized that the process of cutting interest rates must be cautious and gradual. He indicated that the ECB will reassess economic data following the June meeting, which is anticipated to mark the beginning of rate cuts. Kazaks’ comments highlight a careful and data-driven approach to adjusting monetary policy.

Meanwhile in the UK, Bank of England’s Deputy Governor, Ben Broadbent, suggested that a rate cut could be possible this summer, contingent on how economic data evolves. He acknowledged that while rates will need to become less restrictive eventually, it remains unclear how long the secondary effects of inflation will persist. This stance aligns with market expectations, which currently place a high probability (~98%) on a rate cut by August and a significant possibility (~58%) of a move in June, depending on upcoming UK CPI data.

Atlanta Fed President Raphael Bostic (who also speaks later today) remarked that it will take some time before there is certainty that inflation is moving toward the 2% target. He noted that recent inflation data has been inconsistent, but he remains optimistic that inflation will continue to decline this year and into the next. Despite this, Bostic emphasized that there is still significant progress to be made. He mentioned that the Fed is considering all possible economic outcomes, with current risks being balanced. Bostic also highlighted that the Fed’s policy stance remains restrictive. Business leaders have reported a gradual slowdown in economic activity, and Bostic believes it will take time for this trend to fully impact the economy.

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

  • Crude oil is trading down -$0.23 at $79.35. At this time Friday, the price was at $78.70
  • Gold is trading Up $9.58 or 0.40% at $2424.00. At this time Friday, the price was higher at $2389.70
  • Silver is trading down $0.24 or -0.79% at $31.24. On Friday the price surged to the highest level since 2012.At this time Friday, the price was at $29.75
  • Bitcoin currently trades at $67,063. At this time Friday, the price was trading at $66,272

In the premarket, the major indices are higher. On Friday the Dow industrial average closed above 40,000 for the first time that

  • Dow Industrial Average futures are implying a gain of 30.41 points. Friday, the index rose 134.21 points or 0.34% at 40003.60
  • S&P futures are implying a gain of 10.74 points. Friday, the index rose 6.17 points or 0.12% at 5303.26
  • Nasdaq futures are implying a gain of 50 points Friday, the index fell -4.35 points or -0.07% at 16685.97

European stock indices are trading lower:

  • German DAX, Closed
  • France CAC , Close
  • UK FTSE 100, Close
  • Spain’s Ibex, +0.19%
  • Italy’s FTSE MIB, (delayed 10 minutes).

Shares in the Asian Pacific markets were higher after the strong gains in the US yesterday:

  • Japan’s Nikkei 225, +0.73%
  • China’s Shanghai Composite Index,+0.54%
  • Hong Kong’s Hang Seng index, +0.42%
  • Australia S&P/ASX index, +0.63%

Looking at the US debt market, yields are Little changed

  • 2-year yield 4.822%, -0.3 basis point. At this time yesterday, the yield was at 4.795%
  • 5-year yield 4.441% unchanged. At this time yesterday, the yield was at 4.413%
  • 10-year yield 4.419%, unchanged. At this time yesterday, the yield was at 4.394%
  • 30-year yield 4.558%, -0.2 basis points. At this time yesterday, the yield was at 4.540%

Looking at the treasury yield curve spreads:

  • The 2-10 year spread is at -40.2 basis points. At this time yesterday, the spread was at -40.3 basis points.
  • The 2-30 year spread is at -26.5 basis points. At this time yesterday, the spread was at -25.6 basis points.

This article was written by Greg Michalowski at Source