CURRENCY MARKET WRAP
As of Wed Oct 16th, Singapore Time zone UTC+8
U.S. Dollar Index, -0.14%, 98.31
USDJPY, +0.38%, $108.81
EURUSD, +0.05%, $1.1034
GBPUSD, +1.21%, $1.2760
USDCAD, -0.21%, $1.3205
AUDUSD, -0.32%, $0.6753
NZDUSD, -0.06%, $0.6295
U.S. Empire State Manufacturing Survey for October, increased to 4.0 (consensus -1.0) from 2.0. Trade news continued to make headlines, although the muted reaction likely reflected some exhaustion to trade speculation. “People familiar with the matter” told Bloomberg News that China may struggle fulfilling part of its agreement to purchase $50 billion of U.S. agricultural goods unless Trump lifts retaliatory tariffs.
U.S. Treasuries finished near their session lows, leaving yields slightly higher. The 2-yr yield increased one basis point to 1.61%, and the 10-yr yield increased two basis points to 1.77%. The U.S. Dollar Index declined 0.14% to 98.31. WTI crude declined 1.4%, or $0.76, to $53.55/bbl.
With 16 days left before the UK is scheduled to leave the European Union, a Brexit deal is in sight, but its important for investors to tread cautiously because of the inevitable resistance from the DUP and reports from “senior EU officials” that its “way too premature” to assume that a Brexit deal is imminent. Johnson will still have to win over parliament – including the Democratic Unionist party (DUP) and the hardline Tory Brexiters of the European Research Group (ERG) – on the basis that, under the deal, Northern Ireland will still legally be within the UK’s customs territory. Nonetheless sterling and many other major currencies traded sharply higher today on reports that EU and UK Brexit negotiators are close to a deal after Boris Johnson agreed to have a customs border down the Irish Sea.
STOCK MARKET WRAP
S&P500, +1.00%, 2,995.68
Nasdaq, +1.24%, 8,148.71
Nikkei Futures, +1.86%, 22,497.5
The S&P 500 rose 1.0% on Tuesday, as JPMorgan Chase (JPM 119.96, +3.51, +3.0%), UnitedHealth (UNH 238.59, +18.00, +8.2%), and Johnson & Johnson (JNJ 132.84, +2.12, +1.6%) kicked off the third quarter reporting season with better-than-expected earnings results.
Most of today’s advance came in the early going. The S&P 500 opened just 0.3% higher, and it quickly pushed to session highs amid news that the EU and UK are nearing a draft Brexit deal and that General Motors (GM 36.26, +0.76, +2.1%) and the UAW could also reach a deal soon. Although nothing was finalized, the optimism helped solidify a risk-on mindset following today’s batch of better-than-feared earnings results.
Elsewhere, the Philadelphia Semiconductor Index (+2.2%) set a new all-time high on Tuesday. 29 of its 30 components finished higher, with NVIDIA (NVDA 196.37, +9.84, +5.3%) advancing the most after its price target was raised to $250 from $225 at Bank of America/Merrill Lynch.