Daily Market Pulse

The first trading day of 2024 would see the USD (by BBDXY measure) gain 0.7%, its largest single-day gain since March of last year. Investors await today’s 2PM Fed meeting minutes - there is an expectation growing that the minutes will potentially show some pushback against 2024 rate cuts after Powell’s dovish pivot at the mid-December meeting drove stocks and bonds higher.

Today’s US data includes ISM indices and the JOLTS job release at 10AM, while employment data follows tomorrow in the ADP release and Friday’s NFP. Richmond Fed President Barkin commented this morning that the potential for more rate hikes remain on the table as demand continues to potentially keep inflation above-target.

The U.S. federal government's total public debt has reached $34 trillion for the first time, the U.S. Treasury Department reported on Tuesday. Members of Congress await another series of federal funding battles in the coming weeks.

The EUR/USD would fall 0.9% to open the year yesterday, continuing to track lower today driven by a focus on weaker GER employment data. Eurozone aggregate services and composite PMI data is released tomorrow followed by inflation data on Friday.

The GBP/USD similarly fell against the USD to the rune of 0.8% yesterday, though has traded steady near yesterday’s close into today’s sessions. The Canadian Dollar would fall 0.6% yesterday in-line with asset-price drops including crude oil.

Small losses overnight would continue, though the CAD remains a relative outperformer against many G10 counterparts this morning with crude futures seeing some rebound.

The JPY is the main G10 underperformer versus the USD to start the year, losing nearly 0.8% yesterday and another 0.6% today as investors doubt the BOJ will make a quick exit from negative rates as economic data drags.