CURRENCY MARKET WRAP
As of Wed Aug 7th, Singapore Time zone UTC+8
Dollar Index +0.05%, 97.56
USDJPY, +0.35%, $106.32
EURUSD, +0.03%, $1.1205
GBPUSD, +0.23%, $1.2170
USDCAD, +0.50%, $1.3282
AUDUSD, +0.07%, $0.6762
NZDUSD, +0.05%, $0.6531
The People’s Bank of China set the daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong. The moves, which came hours after the U.S. labeled the country a currency manipulator, helped drive the offshore Yuan higher. China’s central bank will sell 30 billion yuan ($4.2 billion) of bills in Hong Kong on Aug. 14, according to a PBOC statement Tuesday. The move typically drains liquidity offshore, making it more costly to short the Chinese currency.
This helped subside some of yesterday’s currency-related angst and contribute to a more risk-on mindset throughout the day.
While equities rallied, the U.S. Treasury yield curve continued to flatten, which reflected ongoing concerns about the economic outlook. The 2-yr yield increased three basis points to 1.61%, and the 10-yr yield finished flat at 1.74%. The U.S. Dollar Index increased 0.05% to 97.56.
STOCK MARKET WRAP
S&P500, +1.30%, 2,881.77
Nasdaq, +1.39%, 7,833.27
Nikkei Futures, -0.33%, 20,522.5
U.S. stocks rebounded from their worst day of the year on Tuesday, as investors appeared comfortable in buying the dip after China took steps to stabilise its currency. The major indices closed near session highs with the S&P 500 advancing 1.3%. The Dow Jones Industrial Average increased 1.2%, the Nasdaq Composite increased 1.39%, and the Russell 2000 increased 1.0%.
Nine of the 11 S&P 500 sectors finished higher by at least 1.0%. The information technology (+1.6%), financials (+1.5%), and industrials (+1.5%) sectors led the advance, while the energy sector (-0.1%) was the lone holdout as oil prices ($53.84/bbl, -$0.80, -1.5%) continued to decline.
Take-Two Interactive (TTWO 124.56, +9.18, +8.0%), KLA Corporation (KLAC 135.64, +9.18, +7.3%), and Zoetis (ZTS 121.17, +8.60, +7.6%)were some of today’s biggest gainers following upbeat results and/or guidance. Chemicals company Mosaic (MOS 22.02, -1.58, -6.7%) fell nearly 7% after providing disappointing results and guidance. In other corporate news,DuPont (DD 68.53, +2.47, +3.7%) outperformed following a Bloomberg report indicating that the company is considering selling its biosciences unit, which could sell for $20 billion.