CURRENCY MARKET WRAP
As of Fri 13 Dec, Singapore Time zone UTC+8
U.S. Dollar Index, +0.20%, 97.250
USDJPY, +0.78%, 109.40
EURUSD, +0.48%, 1.1184
GBPUSD, +2.11%, 1.3474
USDCAD, -0.14%, 1.3154
AUDUSD, +0.71%, 0.6925
NZDUSD, +0.50%, 0.6619
U.S. PPI was unchanged m/m in November (consensus 0.2%) while core PPI, which excludes food and energy, declined 0.2% (consensus 0.2%). That left the y/y increases at 1.1% and 1.3%, respectively, versus 1.1% and 1.6% in October. Initial claims for the week ending December 7 rose by 49,000 to 252,000 (consensus 212,000). Continuing claims for the week ending November 30 decreased by 31,000 to 1.667 million.
U.S. session started with Trump tweeting that a trade deal was close and The Wall Street Journal reporting that the U.S. offered to reduce existing tariffs and cancel the Dec. 15 tariffs. Later, Bloomberg reported that a deal in principle was reached and was awaiting Trump’s signature. A deal would include rolling back some tariffs and delaying the Dec. 15 tariffs in exchange for China to purchase more U.S. farm goods. Stocks rallied toward session highs while Treasuries continued to sell-off in a risk-on trade.
The 2-yr yield rose six basis points to 1.67%, and the 10-yr yield rose 11 basis points to 1.90%. The U.S. Dollar Index increased 0.1% to 97.29.
Overseas, it was election day in the UK, but polls remained opened by the close of U.S. markets. The ECB left rates unchanged on Thursday, as was expected, while Lagarde said she was seeing initial signs of recovery.
STOCK MARKET WRAP
S&P500, +0.86%, 3,168.57
Nasdaq, +0.73%, 8,717.32
Nikkei Futures, +2.14%, 23,870.0
The S&P 500 cyclical sectors led the advance, with the energy sector (+2.0%) finding additional support in higher oil prices ($59.18, +0.44, +0.8%) and the financials sector (+2.0%) benefiting from some curve-steepening activity. Trade-sensitive stocks like Wynn Resorts (WYNN 132.27, +11.44, +9.5%) and those in the Philadelphia Semiconductor Index (+2.7%) also outperformed.
In other corporate news, Delta Air Lines (DAL 56.69, +1.61, +2.9%) pleased investors with a reassuring FY20 forecast. General Electric (GE 11.44, +0.47, +4.3%) and FedEx (FDX 164.89, +5.81, +3.7%) benefited from analyst upgrades.