USD Holds Steady as Big Banks Beat and ECB Hawks Circle
Major currencies are barely moving while blockbuster earnings and hawkish ECB talk set the tone heading into PPI data.
The dollar isn't doing much right now — all three major pairs are within 0.13% of flat — but don't mistake calm for boring. Under the surface, there's real ammunition building. Earnings season just delivered a clean sweep, the ECB is talking tough, and PPI drops at 8:30 AM ET. Pick your catalyst.
Morgan Stanley blew past estimates with EPS of $3.46 against a $2.93 forecast. BlackRock crushed it too — $13.91 adjusted EPS versus $12.61 expected. Bank of New York Mellon, Johnson & Johnson, chipmaker ASML, and luxury giant Richemont all beat on both earnings and revenue. J&J even raised its full-year 2026 outlook. The message from corporate America: resilient capital markets, strong fee income, and margins holding up better than feared. That's a green light for risk appetite — at least for now.
Read more Nasdaq Climbs as Amazon Surges, Apple Drags on Weak Outlook →
The ECB is the wildcard. Three policymakers spoke overnight and every one of them leaned hawkish. Fabio Panetta flagged eurozone inflation running near 3% and warned it could stay above that level into early 2027. Joachim Nagel said the ECB needs to stay vigilant and be ready to act decisively. Even the most neutral voice in the group, Klaas Knot, stressed the ECB can adjust policy at any moment. No one is talking cuts. That kind of unified hawkish chorus keeps EUR bears on defense.
US yields are pushing higher — the 2-year is up to 4.214% and the 10-year is sitting at 4.611%, both up roughly 2-3 basis points. Stock futures are pointing to a marginally green open: Dow up 45, S&P up about 3, Nasdaq leading with 120 points of implied gain. The setup favors bulls, but PPI is the reality check. Yesterday's CPI came in softer than expected — if PPI follows suit, rate-cut bets get a fresh jolt. If it surprises hot, those yield moves get ugly fast. Bank of Canada also decides rates today, adding a wildcard for CAD crosses.
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