CURRENCY MARKET WRAP 

As of Fri Sep 6th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.08%, 98.37
USDJPY, +0.57%, $107.00
EURUSD, +0.01%, $1.1036
GBPUSD, +0.59%, $1.2325
USDCAD, +0.03%, $1.3228
AUDUSD, +0.24%, $0.6813
NZDUSD, +0.22%, $0.6374

In trade, United States and China have agreed to return to the negotiating table in Washington to discuss trade. It will be the first face-to-face meeting between the two sides since the trade war’s rapid escalation in recent weeks.
The trade meeting, which was announced by China, is expected to take place in Washington in early October. Both countries said they will continue talking ahead of that in-person meeting. The countries agreed to “create good conditions for negotiation,” China’s Commerce Ministry said. US trade authorities said that deputy-level meetings this month will “lay the groundwork for meaningful progress.”

The positive bias was reinforced heading into the U.S. open as the ADP Employment Change Report (195,000 in August vs consensus 150,000) for August and the weekly initial claims report (217,000 vs consensus 214,000) provided a healthy insight into the U.S. labor market. Better-than-expected factory orders (1.4% vs consensus 1.0%) and non-manufacturing activity (2.3% vs consensus 2.2%) for August solidified the risk-on sentiment that was upheld throughout the rest of the session.

Treasury yields took a leg higher soon after the release of the ISM Non-Manufacturing Index for August, which increased to 56.4% (consensus 54.0%) from 53.7% in July. Yesterday’s data, in aggregate, erased the small possibility in the market’s mind for a 50-basis points rate cut at the September FOMC meeting, according to the CME FedWatch Tool. The still expects a 25-bps cut amid decent data.

The 2-yr yield increased ten basis points to 1.54%, and the 10-yr yield increased 11 basis points to 1.57%. The U.S. Dollar Index was relatively unchanged at 98.37. WTI crude inched up 0.2%, or $0.10, to $56.31/bbl.

STOCK MARKET WRAP 

S&P500, +1.30%, 2,976.00
Nasdaq, +1.75%, 8,116.83
Nikkei Futures, +2.19%, 21,153.0

U.S. stocks rallied for the second straight day on Thursday, buoyed by news that the U.S. and China will hold trade talks next month and by encouraging economic data that eased recessionary concerns. The S&P 500 (+1.3%), Dow Jones Industrial Average (+1.4%), and Nasdaq Composite (+1.75%) each closed above their 50-day moving averages. The Russell 2000 advanced 1.8%.

The trade-sensitive S&P 500 information technology (+2.1%), consumer discretionary (+1.9%), and industrials (+1.8%) sectors were among today’s leaders. The financials sector (+1.9%) also outperformed amid a sell-off in the U.S. Treasury market that sent yields noticeably higher. The defensive-oriented, and rate-sensitive, utilities (-1.2%), real estate (-0.9%), and consumer staples (-0.7%) sectors finished lower.

CURRENCY MARKET WRAP 

As of Thu Sep 5th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.61%, 98.40
USDJPY, +0.38%, $106.34
EURUSD, +0.55%, $1.1034
GBPUSD, +1.32%, $1.2246
USDCAD, -0.81%, $1.3226
AUDUSD, +0.57%, $0.6797
NZDUSD, +0.32%, $0.6356

In Hong Kong, Carrie Lam announces formal withdrawal of the extradition bill and she will also set up an investigative platform to look into the fundamental causes of the social unrest and suggest solutions for the way forward — though stopping short of turning it into a full-fledged commission of inquiry, as demanded by protesters. Apart from the formal withdrawal of the legislation, the protesters have asked for the government to set up a commission of inquiry to investigate police conduct in tackling the protests; grant amnesty to those who have been arrested; stop characterising the protests as riots; and restart the city’s stalled political reform process.

The reaction to the Hong Kong news was made most pronounced in the region’s Hang Seng Index (+3.9%), but the positive sentiment did carry over into global markets as well. In terms of its implications for U.S. companies, some viewed the reprieve as one less obstacle in U.S.-China trade talks.

U.S. Treasuries continued to see increased demand despite the rally in equities, putting some pressure on yields. The 2-yr yield declined three basis points to 1.44%, and the 10-yr yield declined one basis point to 1.46%.

In Brexit, Tory rebels and opposition MPs have defeated the government in the first stage of their attempt to pass a law designed to prevent a no-deal Brexit. The Commons voted 328 to 301 to take control of the agenda, meaning they can bring forward a bill seeking to delay the UK’s exit date. Boris Johnson has lost three key parliamentary votes in less than 24 hours. 1) He was first defeated on Wednesday when the opposition, joined by a group of 21 Conservative rebels, seized control of parliamentary business. 2) He then failed to stop a bill blocking no-deal Brexit from going through. 3) And finally, he lost a vote on whether to hold an early election.

In Canada, the BoC has decided to keep its benchmark rate at 1.75 per cent (expected), despite “escalating trade conflicts” that are starting to take a toll on the country’s economy. The central bank said on Wednesday it has elected to neither raise nor lower its benchmark rate, judging the economy to be growing at a healthy clip despite uncertainty over international trade. The bank noted that exports are growing, the housing market is showing signs of a rebound, and wages are picking up. The Loonie strengthened on the back of a more hawkish than expected statement.

STOCK MARKET WRAP 

S&P500, +1.08%, 2,937.78
Nasdaq, +1.30%, 7,976.88
Nikkei Futures, +0.62%, 20,788.0

The stock market snapped back on Wednesday, catalyzed by news that Hong Kong agreed to withdraw its extradition bill while a weaker dollar supported the positive bias in the wake of the latest Brexit news. The S&P 500 (+1.08%) and Nasdaq Composite (+1.3%) increased over 1.0%, while the Dow Jones Industrial Average (+0.9%) and Russell 2000 (+0.9%) advanced 0.9%.

The market was also undeterred by downside guidance from Starbucks (SBUX 96.11, -0.66, -0.7%), Tyson Foods (TSN 86.06, -7.23, -7.8%), JetBlue (JBLU 16.39, -0.78, -4.5%), and American Eagle Outfitters (AEO 14.38, -1.89, -11.6%).

CURRENCY MARKET WRAP 

As of Wed Sep 4th, Singapore Time zone UTC+8

U.S. Dollar Index, -0.02%, 98.94
USDJPY, -0.34%, $105.86
EURUSD, +0.05%, $1.0973
GBPUSD, +0.19%, $1.2091
USDCAD, +0.10%, $1.3340
AUDUSD, +0.71%, $0.6763
NZDUSD, +0.48%, $0.6338

U.S. market digested several global events after the long holiday weekend. Additional tariffs imposed by the U.S. and China on each other went into effect on Sunday, much to the dismay of those hoping for a reprieve. Separately, protests escalated in Hong Kong, and UK Prime Minister Boris Johnson threatened to call a snap election if rebel lawmakers vote to block a no-deal Brexit. Johnson lost his party’s parliamentary majority yesterday.

The release of the U.S. ISM Manufacturing Index for August did not help market sentiment, which declined to 49.1% (consensus 51.3%) from a 51.2% reading in July. This denoted the first contraction (a reading below 50.0%) since 2016. The broader market quickly fell to session lows and traded below its opening levels for the rest of the session.

U.S. Treasury yields fell to session lows soon after the release of the ISM Manufacturing Index but steadily came off those lows as the session progressed. The 2-yr yield finished three basis points lower at 1.47%, and the 10-yr yield finished four basis points lower at 1.47%. The U.S. Dollar Index decreased -0.02% to 98.94. WTI crude lost 2.1%, or $1.15, to $53.91/bbl.

STOCK MARKET WRAP 

S&P500, -0.69%, 2,906.27
Nasdaq, -1.11%, 7,874.16
Nikkei Futures, -0.11%, 20,573.0

The stock market finished lower on Tuesday to begin the shortened trading week and the month of September. The S&P 500 declined 0.69%, while the Dow Jones Industrial Average (-1.1%), Nasdaq Composite (-1.1%), and Russell 2000 (-1.5%) fell more than 1.0%.

In corporate news, Boeing (BA 354.42, -9.67, -2.7%)fell on a report from The Wall Street Journal indicating its 737 MAX could be grounded through the holiday season. Uber (UBER 30.70, -1.87, -5.7%)and Lyft (LYFT 45.42, -3.55, -7.3%) hit new all-time lows as California moved closer to classify drivers as employees instead of contractors.

Amazon (AMZN 1789.84, +13.55, +0.8%) outperformed after RBC Capital Mkts raised its AMZN price target to $2600 from $2250.

CURRENCY MARKET WRAP 

As of Tue Sep 3rd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.12%, 99.04
USDJPY, +0.07%, $106.21
EURUSD, -0.26%, $1.0963
GBPUSD, -0.79%, $1.2063
USDCAD, +0.10%, $1.3331
AUDUSD, -0.20%, $0.6712
NZDUSD, +0.06%, $0.6304

In Chinese data, China’s manufacturing activity expanded in August after shrinking for two months as factory output grew at its fastest clip in five months. The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the manufacturing sector’s operating conditions, increased to 50.4 (consensus 49.8) in August from 49.9 in the previous month.

In U.K., manufacturers have recorded the sharpest drop in factory output for seven years as mounting concerns over no-deal Brexit and the slowing global economy hit orders across the country. Manufacturing PMI came in at 47.4 (consensus 48.0). The report found that EU-based customers are shunning British manufacturers as the risk of no-deal Brexit mounts, rerouting supply chains away from the UK as the likelihood of border disruption after 31 October increases.

STOCK MARKET WRAP 

S&P500 – Closed –
Nasdaq *- Closed -*
Nikkei Futures, -0.11%, 20,573.0

U.S. markets were closed for Labour Day.

CURRENCY MARKET WRAP 

As of Mon Sep 2nd, Singapore Time zone UTC+8

U.S. Dollar Index, +0.30%, 98.81
USDJPY, -0.20%, $106.31
EURUSD, -0.60%, $1.0991
GBPUSD, -0.23%, $1.2184
USDCAD, +0.20%, $1.3312
AUDUSD, +0.16%, $0.6737
NZDUSD, -0.05%, $0.6308

U.S. Personal income increased 0.1% m/m in July (consensus +0.4%), which was weaker than expected thanks to a 1.8% decline in personal interest income, but personal spending increased a stronger-than-expected 0.6% (consensus +0.5%). The PCE Price Index and core PCE Price Index, which excludes food and energy, were both up 0.2%, which was also expected. The key takeaway from the report is that consumer spending is solid and inflation is stable, albeit at below-target levels. All in all, there isn’t a lot of ammunition in the report for the Fed to fire off a 50-basis points rate cut at its September meeting.

U.S. Treasuries finished slightly higher in a muted session. The 2-yr yield declined two basis points to 1.50%, and the 10-yr yield declined one basis point to 1.51%. The U.S. Dollar Index advanced 0.3% to 98.81.

In Canada, the economy blew past projections by expanding at an annualised pace of 3.7% in the second quarter (consensus 3.0%), giving Canada its strongest three-month stretch of growth in two years.

STOCK MARKET WRAP 

S&P500, +0.06%, 2,926.46
Nasdaq, -0.13%, 7,962.88
Nikkei Futures, +1.12%, 20,690.0

The stock market finished little changed on Friday in a lackluster session before the holiday weekend. The S&P 500 (+0.06%) and Dow Jones Industrial Average (+0.2%) finished just above their flat lines, while the Nasdaq Composite (-0.13%) and Russell 2000 (-0.1%) finished slightly lower.

The market struggled to find direction amid missing leadership from some of its biggest technology names within the S&P 500 consumer discretionary (-0.6%), communication services (-0.1%), and information technology (unch) sectors. The materials (+0.7%), industrials (+0.4%), and financials (+0.4%) sectors did provide some support for the broader market.

In earnings news, shares of Ulta Beauty (ULTA 237.73, -99.72, -29.6%) tanked 30% after the company missed revenue estimates and lowered its full-year guidance. Workday (WDAY 177.28, -10.37, -5.5%)led the cloud software stocks lower despite positive results and upbeat guidance.

Notable standouts included Dell (DELL 51.53, +4.76, +10.2%)and Campbell Soup (CPB 45.00, +1.69, +3.9%) after both beat earnings expectations.

CURRENCY MARKET WRAP 

As of Fri Aug 30th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.22%, 98.42
USDJPY, +0.31%, $106.44
EURUSD, -0.17%, $1.1059
GBPUSD, -0.23%, $1.2184
USDCAD, -0.18%, $1.3283
AUDUSD, +0.02%, $0.6736
NZDUSD, -0.35%, $0.6317

U.S. consumer spending growth was revised up to 4.7% from 4.3%, which was the strongest growth since the fourth quarter of 2014. Granted it’s a backward-looking data point, yet it offers a nice reminder that the U.S. consumer, supported by a tight labor market, has remained in good shape.

In trade, China’s Commerce Minister Gao repeated his country’s willingness to proceed with negotiations in a “calm” manner, adding Beijing wasn’t planning on immediately retaliating on the latest U.S. tariff increases. Gao hoped discussions could help remove the new tariffs imposed by the U.S., although he refrained from answering if retaliatory measures were entirely off the table.

The 2-yr yield increased one basis point to 1.52%, and the 10-yr yield increased five basis points to 1.52%. The U.S. Dollar Index advanced 0.3% to 98.45.

STOCK MARKET WRAP 

S&P500, +1.27%, 2,924.58
Nasdaq, +1.48%, 7,973.39
Nikkei Futures, +0.85%, 20,655.0

Each of the major U.S. indices rose more than 1.0% on Thursday, lifted by China indicating it wants to prevent trade tensions from further escalating. The S&P 500 (+1.3%) and Dow Jones Industrial Average (+1.3%) both increased 1.3%. The Nasdaq Composite (+1.5%) and Russell 2000 (+1.6%) pulled out ahead.

Ten of the 11 S&P 500 sectors finished in positive territory. The industrials (+1.8%) and information technology (+1.7%) sectors outperformed amid solid gains in the trade-sensitive transportation and semiconductor spaces. The Dow Jones Transportation Average increased 2.0%, and the Philadelphia Semiconductor Index increased 2.3%. The consumer staples sector (unch) was unchanged.

CURRENCY MARKET WRAP 

As of Thu Aug 29th, Singapore Time zone UTC+8

U.S. Dollar Index, +0.19%, 98.19
USDJPY, +0.34%, $106.08
EURUSD, -0.05%, $1.1085
GBPUSD, -0.58%, $1.2218
USDCAD, +0.19%, $1.3307
AUDUSD, -0.19%, $0.6740
NZDUSD, -0.38%, $0.6337

Wednesday’s session didn’t include any market-moving news or notable economic data, and it was mostly quiet on the U.S.-China trade front. In turn, there was an early fixation on the Treasury market, where the continued decline in yields fed into concerns about economic and corporate earnings growth. The 2-yr and 10-yr yields declined two basis points each to 1.51% and 1.47%, respectively. The U.S. Dollar Index increased 0.19% to 98.19.

Treasury Secretary Steven Mnuchin said on Wednesday the possibility of issuing ultra-long U.S. bonds is “under very serious consideration” by the Trump administration, Bloomberg News reported. “If the conditions are right, then I would anticipate we’ll take advantage of long-term borrowing and execute on that,” Mnuchin told Bloomberg in an interview. Mnuchin said his renewed interest in 50- or 100-year bonds was unrelated to the drop in yields on shorter-term U.S. debt.

Elsewhere, Queen Elizabeth II approved UK Prime Minister Boris Johnson’s plan to suspend Parliament until Oct. 14, increasing the likelihood of a no-deal Brexit on Oct. 31.

STOCK MARKET WRAP 

S&P500, +0.65%, 2,887.94
Nasdaq, +0.38%, 7,856.88
Nikkei Futures, +0.29%, 20,480.0

U.S. stocks finished higher on Wednesday in a broad-based advance. The S&P 500 increased 0.65%, quickly overcoming a negative start that was attributed to declining Treasury yields and finished near session highs.

Ten of the 11 S&P 500 sectors finished the day in positive territory. Energy (+1.4%), consumer discretionary (+1.1%), and industrials (+1.1%) set the pace, while the utilities sector (-0.3%) was the lone holdout. The energy sector entered today’s session down over 10% in August, but it found some reprieve amid higher oil prices ($55.76/bbl, +$0.86, +1.6%) following bullish inventory data.

Coty (COTY 9.33, +0.53, +6.0%)and Tiffany & Co. (TIF 85.16, +2.49, +3.0%)outperformed following their earnings reports. Autodesk (ADSK 140.08, -10.13, -6.7%) fell after it provided some disappointing guidance that put some pressure on other software stocks within the information technology sector (+0.1%).