US PPI/Jobless claims, Tariffs and Geo/politics. Technicals for EURUSD, USDJPY, GBPUSD

In the video above, I provide a technical snapshot of the three major currency pairs—EUR/USD, USD/JPY, and GBP/USD. The USD is weaker against all three, driven by lower yields. The biggest mover is USD/CHF, down -0.67%, with EUR/CHF also lower by -0.54%. This decline comes despite CPI figures of -0.1% MoM and 0.4% YoY, as well as the potential for peace, though not imminently. On the daily chart, USD/CHF reached 0.9155, just 1 pip shy of a key swing area at 0.9156.

Politcal and geopolitical news is also a driver. This morning Pres. Trump balanced the news by saying today is the “TODAY IS THE BIG ONE!!! RECIPRICOL TARIFFS!!!” (his capital lettering). Yippee. He balanced that by saying ” GREAT TALKS WITH RUSSIA AND UKRAINE YESTERDAY. GOOD POSSIBILITY OF ENDING THAT HORRIBLE. VERY BLOODY WAR!!!!”. Yesterday, that news helped push the US stocks higher.

The U.S. PPI is set for release at 8:30 AM ET, following yesterday’s disappointing CPI data. Analysts will watch for signs that CPI price increases have spilled over into PPI. These figures, combined, help calculate the Fed’s preferred PCE inflation gauge, as noted by Fed Chair Powell in his testimony.

• PPI Expectations: +0.3% for both headline and core
• YoY Forecasts: 3.2% (headline), 3.3% (core)

Also at 8:30 AM, weekly jobless claims are expected at 215K (prev. 219K), with continuing claims forecast at 1.880M (prev. 1.886M).

US stocks closed mixed yesterday with the Nasdaq closing marginally higher, the S&P and the Dow closed lower. Below is the snapshot of the closing levels::

• Dow industrial average -225.03 points or -0.50% at 44368.62.
• S&P index -16.56 points or -0.27% at 6051.94.
• NASDAQ index rose 6.09 points or 0.03% at 19649.95.

Today, the futures are implying small changes in the major indices::

• Dow industrial average +4.4 points
• S&P index -2.4 points
• Nasdaq index +21.2 points

For the Meta Watch (18 straight higher closes) , the pre-market trading is implying a modest -0.14% decline.

European markets are mostly higher in the U.S. morning snapshot, with the exception of the UK’s FTSE 100, down -0.5%.

• Germany’s DAX hits another record high.
• France’s CAC, Italy’s FTSE MIB, and Spain’s Ibex are reaching new multi-year highs.

The snapshot of the market as the NA session begins shows:

• German DAX, 1.61%
• France’s CAC 1.37%
• UK’s FTSE 100 -0.52%
• Spain’s Ibex 0.24%
• Italy’s FTSE MIB 0.39%

In the US debt market, the yields are lower ahead of PPI, initial jobless claims, reciprocal tariffs, peace rhetoric, etc:

• 2-year yield, 4.3488%, -1.6 basis points
• 5-year yield 4.451%, -3.0 basis points
• 10-year yield 4.597%, -3.7 basis points
• 30-year yield 4.801%, -3.4 basis points

Yesterday yields moved higher by 7 to 9 basis points across the curve after the CPI surprise

At 1 PM, the US treasury will auction 30-year bonds. The 10-year note auctions on Wednesday was met with average demand. The 3- year note auction on Tuesday was met with strong international demand.

Looking at other markets:

• Crude oil is trading down -15 cents or -1.47% at $70.32
• Silver is trading unchanged at $32.19
• Gold is trading up $10 or 0.34% at $2914.55
• Bitcoin is trading down $2000 at $95,900

This article was written by Greg Michalowski at www.forexlive.com.