CURRENCY MARKET WRAP
As of Wed Aug 14th, Singapore Time zone UTC+8
Dollar Index +0.41%, 97.78
USDJPY, +1.23%, $106.61
EURUSD, -0.33%, $1.1177
GBPUSD, -0.09%, $1.2064
USDCAD, -0.19%, $1.3214
AUDUSD, +0.64%, $0.6797
NZDUSD, +0.20%, $0.6461
In trade, the White House announced that it will delay the 10% tariff rate for some items imported from China, including cell phones and laptops, until Dec. 15. Originally, the 10% tariff rate on $300 billion of mostly consumer goods was set to go into effect Sept. 1.Most products will still be taxed on that date, but the decision to delay some big-ticket items followed a “public comment and hearing process,” according to the USTR. Other items will be also removed from the tariff list based on “health, safety, and national security” factors. Trump told reporters he wanted to delay the tariffs so consumers would not be hurt during the Christmas shopping season and said he had a very productive call with China. On a related note, China’s Ministry of Commerce indicated that trade talks will resume over the phone within the next two weeks.
Although structural trade issues remain, the news did serve as a temporary relief to the market that had been grappling with geopolitical uncertainty, growth concerns, weakness in global equities, and declining U.S. Treasury yields.
Shorter-dated U.S. Treasuries sold off, driving yields higher in another curve-flattening trade. The 2-yr yield increased nine basis points to 1.67%, and the 10-yr yield increased four basis points to 1.68%. The general risk-on mood helped the market overlook the continued compression in yields. The U.S. Dollar Index advanced 0.41% to 97.78.
STOCK MARKET WRAP
S&P500, +1.48%, 2,926.32
Nasdaq, +1.95%, 8,016.36
Nikkei Futures, +1.50%, 20,373.0
U.S. stocks rallied on Tuesday after the White House announced that it will delay the 10% tariff rate. Apple (AAPL 208.97, +8.49, +4.2%)led the broad-based advance and contributed to the solid gains in the S&P 500 (+1.48%), Dow Jones Industrial Average (+1.4%), and Nasdaq Composite (+1.95%). The Russell 2000 increased 1.1%.
In turn, the upbeat news contributed to gains in all 11 S&P 500 sectors and a 4% rally in oil prices ($57.04/bbl, +$2.23, +4.1%). Nine sectors advanced at least 1.0%, led by the information technology (+2.5%), consumer discretionary (+1.7%), and communication services (+1.5%) sectors. The Philadelphia Semiconductor Index climbed 3.0%.