CURRENCY MARKET WRAP
As of Fri Aug 16th, Singapore Time zone UTC+8
Dollar Index +0.15%, 98.14
USDJPY, +0.17%, $106.10
EURUSD, -0.26%, $1.1111
GBPUSD, +0.24%, $1.2091
USDCAD, +0.02%, $1.3318
AUDUSD, +0.36%, $0.6773
NZDUSD, -0.03%, $0.6434
In trade, China announced Thursday that it would be forced to take “necessary countermeasures” if Trump moves forward with tariffs set to take effect Sept. 1, continuing the back-and-forth escalation of the trade war even as the conflict elevates fears of a global economic slowdown. Chinese officials offered no further details as to what form countermeasures might take, or whether their trade negotiators would still be coming to the U.S. to continue talks in September. But the message shows China is prepared to dig its heels in, even as it grapples with political protests in Hong Kong and a raft of disappointing economic data.
U.S. economic data, meanwhile, helped placate some growth concerns. Retail Sales for July, showed an increase of 0.7% m/m last month (consensus 0.3%). The data coincided with upbeat results and guidance from Walmart (WMT 112.69, +6.49, +6.1%), which corroborated the view that the U.S. consumer could be the key to ward off a recession.
The U.S. Treasury market, meanwhile, continued to draw in buyers. Yields took a sharp leg lower during the day following some central bank news: (1) The Wall Street Journal reported that the European Central Bank is preparing a “very strong package” of stimulus measures to boost the eurozone economy and (2) the Mexican Central Bank lowered its key lending rate for the first time in over five years (-25bps to 8%). The 2-yr yield finished nine basis points lower at 1.49%, and the 10-yr yield finished five basis points lower at 1.53%. The 30-yr yield fell below 2.00%, finishing five basis points lower at 1.98%. The U.S. Dollar Index increased 0.1% to 98.10.
STOCK MARKET WRAP
S&P500, +0.25%, 2,847.60
Nasdaq, -0.09%, 7,766.62
Nikkei Futures, -1.37%, 20,298.0
Stock market finished mixed on Thursday, as investors weighed the resiliency of the U.S. consumer against familiar growth concerns. The S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.4%) finished higher, while the Nasdaq Composite (-0.1%) and Russell 2000 (-0.4%) finished lower.
Yesterday’s laggards included the S&P 500 cyclical sectors. The energy sector (-0.5%) fell alongside oil prices ($54.38/bbl, -$0.77, -1.4%). The industrials sector (-0.2%) was subject to a 11.3% drop in shares of General Electric (GE 8.01, -1.02)after it was accused of accounting fraud. Information technology (-0.2%) was weighed down by disappointing guidance from Cisco Systems (CSCO 46.25, -4.36, -8.6%).