Forexlive Americas FX news wrap 29 Jan:US Treasury lower borrowing needs kickstart markets

The economic calendar was light today but later in the afternoon, the US Treasury announced the quarterly borrowing requirements:

• Last year, the Treasury estimated Q1 borrowing needs at $816 billion, now expects to borrow $760 billion
• Expects to borrow $202 billion in the April-June quarter, assuming end-June cash balance of $750 billion
• Says it borrowed $776 billion in Q4 — in line with estimates — and
• Ended with cash balance of $769 billion, which was $19 billion higher than estimated due to discount on borrowing

That gave the markets a kickstart with yields moving lower, stocks higher and the USD to the downside.

Looking at yields, the

• 2 year yield moved down to a low of 4.304%. The high yield reached 4.353%. The current price is trading at 4.322%
• 5-year yield moved down to 3.967%, down from 4.042%. The current yield is 3.995%
• 10-year yield moved it down to 4.059% from a high today of 4.15%. The current yield is at 4.085%
• 30-year yield moved down to 4.299% from a high of 4.380%. The current yield is at 4.324%.

In the US stock market, stocks added to their gains after the announcement with the Dow, S&P and NASDAQ index all closing at/near the highs for the day. The S&P and NASDAQ index also closed at new record high levels:

• Doww Industrial Average was a day up 224.02 points or 0.59% at 38333.46.
• S&P index rose 36.98 points or 0.76% at 4927.94
• NASDAQ index rose 172.67 points or 112% at 15628.03

The interest rate sensitive Russell 2000 index of small-cap stocks also benefited with a gain of 33.09 points or 1.67%

The rise and record closes come ahead a number of key earnings releases for the 4Q of 2024. Below is a list of the major earnings releases including Microsoft, AMD, Alphabet, Boeing, Qualcomm, Merck, Apple, Amazon, and Meta. Of course the Federal Reserve will also announce its interest rate decision on Wednesday.

Tuesday

Before Open:

• Pfizer (PFE)
• General Motors (GM)
• UPS
• JetBlue (JBLU)
• Corning (GLW)

After Close:

• Microsoft (MSFT)
• AMD
• Alphabet (GOOGL)
• Starbucks (SBUX)
• Juniper Networks (JNPR)

Wednesday

Before Open:

• Boeing
• Phillips 66 (PSX)
• Mastercard (MA)
• Boston Scientific

After Close:

Thursday

Before Open:

• Altria
• Royal Caribbean Group
• Peleton
• Merck (MRK)
• Honeywell (HON)

After Close:

• Apple
• Amazon (AMZN)
• Meta Platforms (META)

Friday

Before Open:

• Exxon Mobil (XOM)
• Chevron (CVX)
• Bristol Myers Squibb (BMY)
• Cigna (CI)

In the forex market, the decline in yields pushed the USD lower.

• The EURUSD bounced off its 50% midpoint of the move up from the October low to the December high. That level comes in at 1.07936. The low price today reached 1.0795 before bouncing higher. The subsequent high off of the low reached up to 1.0838 which was just short of its 200-day moving average at 1.0842. In the new trading day, getting above the 200-day moving average would be needed to increase the bullish bias.
• The USDJPY fell below its 100-day moving average at 147.573. The low price reached down to 147.246. On the downside, the next target area comes between 146.96 to 146.067. Moving below that level and traders would target the low price from last week which extended down to 146.65.
• The GBPUSD moved lower in the early North American session and in the process moved down to test the 50% midpoint of the move up from the December low. That level comes in at 1.26629. The subsequent payments help by the treasury announcement push the price back above its 200-hour moving average at 1.2703 and its 100-hour moving average 1.2709. The price is currently trading near the 100-hour moving average after extending to the Asian session high at 1.2714 if the price can hold the 200-hour moving average (call it 1.2700), the buyers are more in control.
• The USDCAD on the USD selling brought below its 100 bar moving average on the 4-hour chart at 1.3436 on it’s way to a low of 1.3409. The next target comes against the 38.2% retracement of the move up from the end of December low to the January high. That level comes in at 1.34019. Below that is it 200 bar moving average on the 4-hour chart at 1.33924

In the other markets:

• Crude oil is trading down $1.10 or -1.41% at $76.91
• Spot gold is trading at $14.15 or 0.70% at $2032.05
• Silver is trading up $0.42 or 1.84% at $23.19
• Bitcoin also rose on risk-on sentiment and trades at $43,206.