CURRENCY MARKET WRAP 

As of Wed Jul 24th, Singapore Time zone UTC+8

Dollar Index +0.40%, 97.71  
USDJPY, +0.33%, $108.24
EURUSD, -0.53%, $1.1151
GBPUSD, -0.30%, $1.2438
USDCAD, +0.16%, $1.3141
AUDUSD, -0.59%, $0.6995
NZDUSD, -0.92%, $0.6697

In trade,Robert Lighthizer and senior U.S. officials are set to travel to China next Monday for the first high-level, face-to-face trade negotiationsbetween the world’s two biggest economies since talks broke down in May. However, U.S. officials have played down the likelihood of a quick deal with China. “It is impossible to judge how long it will take when the president’s objective is to get a proper deal or go ahead with tariffs,” Secretary of Commerce Wilbur Ross told Bloomberg TV on Tuesday. “What is important is if we make a deal, it’s a proper deal, a really good deal. That’s his overriding objective. And that’s much more important than exact timing.”

Congress also reached a deal to increase the budget deficit and suspend the debt ceiling for two years.The news provided some relief for investors, but market reaction was mostly muted as the dilemma never appeared to hinder the market beforehand and it was reported yesterday that a deal was close.

U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased two basis points to 1.83%, and the 10-yr yield increased three basis points to 2.07%. The U.S. Dollar Index advanced 0.4% to 97.71, helped by some weakness in the euro. WTI crude rose 0.9% to $56.72/bbl.

In UK, frontrunnerBoris Johnson has defeated rival Jeremy Hunt in the contest to replace Theresa May as Conservative party leader and as Britain’s prime minister. The biggest task for Johnson will be to take Britain out of the EU, but his hardline strategy has plenty of critics. Sterling had little reaction as Johnson’s win was inline with expectations. The attention will now be on who will make up the new Cabinet and what will Johnson’s first move to the EU be as PM.

STOCK MARKET WRAP 

S&P500, +0.68%, 3,005.47
Nasdaq, +0.63%, 7,954.56
Nikkei Futures, +1.58%, 21,698.0

S&P 500 increased 0.68% on Tuesday, bolstered by encouraging trade news and positive earnings reports from widely-held companies. The Dow Jones Industrial Average (+0.7%), Nasdaq Composite (+0.63%), and Russell 2000 (+0.7%) advanced in-line with the benchmark index.

It had been a tight-ranged session for a good part of the day despite positive earnings results and guidance from a diversified group of companies like Coca-Cola (KO 54.33, +3.11, +6.1%), United Technologies (UTX 134.94, +1.99, +1.5%), Sherwin-Williams (SHW 490.23, +35.64, +7.8%), and Biogen (BIIB 243.88, +11.40, +4.9%). Travelers (TRV 147.50, -2.21, -1.5%), however, did come up short of expectations

Ten of the 11 S&P 500 sectors finished higher, led by the trade-sensitive materials (+2.0%) and industrials (+1.2%) sectors. The utilities sector was the lone holdout, finishing lower by 0.6%. Qualcomm (QCOM 74.12, -1.83, -2.4%) was also left out of the advance after The Wall Street Journal reported that Apple (AAPL 208.84, +1.62, +0.8%)is considering buying Intel’s (INTC 51.75, +0.40, +0.8%)smartphone-modem chip business for around $1 billion. The Philadelphia Semiconductor Index finished up 1.2%.

CURRENCY MARKET WRAP 

As of Tue Jul 23rd, Singapore Time zone UTC+8

Dollar Index +0.19%, 97.34  
USDJPY, +0.07%, $107.90
EURUSD, -0.11%, $1.1204
GBPUSD, -0.31%, $1.2472
USDCAD, +0.55%, $1.3127
AUDUSD, -0.19%, $0.7029
NZDUSD, -0.31%, $0.6739

U.S. Dollar advanced on Monday after Boston Fed President Rosengren (FOMC voter) advocated against a rate cut at the July 30-31 policy meeting after Friday’s close. The market appeared undeterred by the stance on Monday, as it still expected a cut of at least 25 basis points.

U.S. Treasuries closed slightly higher in a quiet session. The 2-yr yield and the 10-yr yield declined one basis point each to 1.81% and 2.04%, respectively. The U.S. Dollar Index increased 0.19% to 97.34. WTI crude advanced 1.0% to $56.20/bbl amid lingering concerns that tensions in the Middle East will disrupt supply.

STOCK MARKET WRAP 

S&P500, +0.28%, 2,985.03
Nasdaq, +0.90%, 7,905.12
Nikkei Futures, +0.16%, 21,393.0

S&P 500 increased 0.28% on Monday in a tech-driven advance. Noticeable gains in Apple (AAPL 207.22, +4.63, +2.3%), Facebook (FB 202.32, +23.96, +2.0%), Amazon (AMZN 1985.63, +21.11, +1.1%), and Microsoft (MSFT 138.43, +1.81, +1.3%)contributed to the outperformance of the Nasdaq Composite (+0.9%).

The S&P 500 information technology sector (+1.2%) was Monday’s outright leader, led by shares of Apple and semiconductor companies. The other ten S&P 500 sectors didn’t stray too far from their unchanged marks, although the consumer staples sector (-0.5%) did show relative weakness.

The Philadelphia Semiconductor Index rose 2.0% following positive commentary out of Goldman Sachs. The firm upgraded Micron (MU 47.19, +1.67, +3.7%), Lam Research (LRCX 207.21, +8.74, +4.4%), and Applied Materials (AMAT 50.73, +2.92, +6.1%)to Buy from Neutral, stemming from a positive view on the memory market. Similarly, Apple outperformed after Morgan Stanley raised its price target to $247 from $231.

Notable companies that reported earnings on Monday included Halliburton (HAL 23.74, +1.99, +9.2%)and RPM Inc. (RPM 65.09, +2.80, +4.5%), both of which beat profit estimates. Lennox International (LII 264.00, -14.90, -5.3%), however, came up short of expectations and lowered its full-year guidance.

CURRENCY MARKET WRAP 

As of Mon Jul 22nd, Singapore Time zone UTC+8

Dollar Index +0.40%, 97.15  
USDJPY, +0.37%, $107.82
EURUSD, -0.38%, $1.1217
GBPUSD, -0.24%, $1.2512
USDCAD, +0.14%, $1.3055
AUDUSD, -0.47%, $0.7043
NZDUSD, -0.23%, $0.6760

Price action for most of the day had been muted until Iran said it seized a British oil tanker and The Wall Street Journal reported that the Fed is signaling a 25-basis points rate cut at the July 30-31 FOMC meeting.

The report dampened hopes for a 50-basis points rate cut, which had already been on the decline after a Fed spokesman dialed down comments from NY Fed President Williams that were perceived as dovish. In turn, the fed-funds sensitive 2-yr yield increased four basis points to 1.82%, while the 10-yr yield increased one basis point to 2.05%. The U.S. Dollar Index rose 0.4% to 97.15. According to the CME FedWatch Tool, the implied likelihood for the quarter-point cut climbed to 77.5% from 39.8% on Thursday.

STOCK MARKET WRAP 

S&P500, -0.62%, 2,976.61
Nasdaq, -0.88%, 7,834.90
Nikkei Futures, -0.10%, 21,358.0

S&P 500 faded into the close and lost 0.62% on Friday, as geopolitical angst and expectations for a smaller Fed rate cut weighed on the broader market. The Nasdaq Composite lost 0.88%, and the Russell 2000 lost 0.5%.

The Dow Jones Industrial Average (-0.3%) fared slightly better, supported by shares of Boeing (BA 377.36, +16.25, +4.5%) after it announced a $4.9 billion charge for its 737 MAX grounding.

In other earnings news, Dow components Microsoft (MSFT 136.62, +0.20, +0.2%) and American Express (AXP 124.82, -3.58, -2.8%) beat earnings estimates, but the price action in shares was disappointing. MSFT was up as much as 3.1% today but faded alongside the broader market during the afternoon.

CURRENCY MARKET WRAP 

As of Fri Jul 19th, Singapore Time zone UTC+8

Dollar Index -0.09%, 97.19    
USDJPY, +0.06%, $107.42
EURUSD, 0.00%, $1.1260
GBPUSD, 0.00%, $1.2543    
USDCAD, -0.02%, $1.3036    
AUDUSD, +0.02%, $0.9214    
NZDUSD, +0.05%, $0.6776    

New York Fed President Williams (FOMC voter) catalyzed a slow-moving market after he said that when interest rates are low and there are signs of economic slowing, it is better to lower rates and keep them low rather than keep the Fed’s powder dry. The dovish commentary increased the probability for a 50-basis points rate cut at the July 30-31 FOMC meeting to 66.9% from 34.3% yesterday, according to the fed funds futures market.

Lower rates, which were seen across the U.S. Treasury yield curve, should continue to favor risk assets. The fed-funds sensitive 2-yr yield declined five basis points to 1.78%, and the 10-yr yield declined two basis points to 2.04%. The U.S. Dollar Index lost 0.5% to 96.69.

Separately, oil prices fell for the sixth straight session on Thursday. WTI crude settled 2.8% lower at $55.19/bbl but finished on a high note after Trump said the U.S. Navy defensively shot down an Iranian drone near the Strait of Hormuz.

STOCK MARKET WRAP 

S&P500, +0.36%, 2,978.87
Nasdaq, +0.19%, 7,850.12
Nikkei Futures, +0.13%, 21,118.0    

S&P 500 overcame a sluggish start to increase by 0.4% on Thursday, as dovish Fed commentary bolstered expectations for accomodative monetary policy. In addition, mostly positive reactions to earnings reports helped provide support for the market. 

The Nasdaq Composite and the Russell 2000 both increased 0.3%. The Dow Jones Industrial Average finished flat, pressured by losses in shares of Boeing (BA 361.11, -8.41, -2.3%) and UnitedHealth (UNH 260.60, -6.05, -2.3%) with UNH unable to gain on positive earnings results.

Overall, the gains were modest, but the S&P 500 consumer staples (+0.8%), financials (+0.8%), information technology (+0.8%), and utilities (+0.8%) sectors did gain 0.8% apiece. The communication services sector (-0.9%) was a drag on the market, as shares of Netflix (NFLX 325.21, -37.23) fell 10.3% after disappointing investors with a miss on net subscriber additions. In other earnings news, Philip Morris International (PM 87.71, +6.66, +8.2%), IBM (IBM 149.63, +6.56, +4.6%), Morgan Stanley (MS 44.43, +0.66, +1.5%), and Honeywell (HON 173.88, +5.26, +3.1%) climbed on better-than-expected results.

CURRENCY MARKET WRAP 

As of Thu Jul 18th, Singapore Time zone UTC+8

Dollar Index -0.09%, 97.19    
USDJPY, -0.19%, $107.94    
EURUSD, +0.10%, $1.1227
GBPUSD, +0.03%, $1.2435    
USDCAD, +0.02%, $1.3055    
AUDUSD, +0.14%, $0.7009    
NZDUSD, +0.01%, $0.6732

In Trade, The Wall Street Journal published a report right before the close, indicating that the U.S. and China remain conflicted about restrictions on Huawei Technologies. This further weighed on the already lacklustre risk appetite on Wednesday.

The 2-yr yield declined three basis points to 1.83%, and the 10-yr yield declined six basis points to 2.06%. The U.S. Dollar Index lost 0.2% to 97.21. WTI crude lost 1.4% to $56.78/bbl.

For Canada’s inflation print, the Loonie continues to rise despite benign data. Although consumer prices declined less than expected in the month of June, the -0.2% (consensus -0.3%) decrease was still the first drop in inflation this year. It drove the year over year rate down to 2% from 2.4%.

STOCK MARKET WRAP 

S&P500, -0.65%, 2,984.42
Nasdaq, -0.48%, 7,888.76
Nikkei Futures, -1.34%, 21,133.0

S&P 500 lost 0.6% on Wednesday, pressured by noticeable losses in the transport stocks after CSX Corp. (CSX 71.38, -8.17, -10.3%) provided disappointing earnings results and guidance. The broader market traded modestly lower for most of the day with losses accelerating into the close. CSX was presumably the biggest influence on the transports, but earnings warnings from trucking companies Knight-Swift (KNX 35.08, -0.81, -2.3%) and Covenant Transport (CVTI 14.65, -0.51, -3.4%) also contributed to the negative sentiment.

The S&P 500 industrials sector (-2.2%) was Wednesday’s outright laggard, nearly doubling the losses of the second-worst performing energy sector (-1.2%). There were some bright spots in the space, though. Top-weighted component Boeing (BA 369.52, +6.77) rose 1.9% on no specific news catalyst, while United Airlines (UAL 94.78, +0.86, +0.9%) and Cintas (CTAS 260.37, +20.93, +8.7%) advanced on better-than-expected earnings results.

The S&P 500 utilities (+0.4%) and health care (+0.02%) sectors were the lone sectors that finished higher. Abbott Labs (ABT 85.76, +2.60, +3.3%) gave the health care sector some support after pleasing investors with its earnings results. Despite earnings-related gains in Bank of America (BAC 29.19, +0.20, +0.7%) and U.S. Bancorp (USB 54.22, +1.18, +2.2%), the S&P 500 financial sector (-0.9%) was unable to gain any ground. Most components finished lower, as the decline in U.S. Treasury yields, and some curve-flattening, weighed on the sector.

CURRENCY MARKET WRAP 

As of Wed Jul 17th, Singapore Time zone UTC+8

Dollar Index +0.05%, 96.82     
USDJPY, -0.03%, $108.21    
EURUSD, +0.01%, $1.1212 
GBPUSD, +0.03%, $1.2409 
USDCAD, -0.06%, $1.3087
AUDUSD, +0.02%, $0.7016  
NZDUSD, +0.13%, $0.6701    

U.S. Retail sales for June increased 0.4% (consensus 0.2%), which contributed to the declining interest in U.S. Treasuries. The 2-yr yield and the 10-yr yield increased three basis points each to 1.86% and 2.12%, respectively. The U.S. Dollar Index advanced 0.5% to 97.38.

Dovish comments from Powell and Chicago Fed President Evans (FOMC voter) affirmed expectations for at least a 25-basis points rate cut at the July 30-31 FOMC meeting. A 50-basis points rate cut or further rate cuts beyond this month, however, remains less clear. On Tuesday, better-than-expected retail sales for June and Dallas Fed President Kaplan (non-FOMC voter) advocating against aggressive rate cuts kept hopes subdued.

STOCK MARKET WRAP 

S&P500, -0.34%, 3,012.13      
Nasdaq, -0.50%, 7,958.50
Nikkei Futures, -0.26%, 21,455.0

The session began with very little price action, although the Dow did set a new all-time high in the early going amid positive reactions to earnings reports from JPMorgan Chase (JPM 115.12, +1.22, +1.1%) and Goldman Sachs (GS 215.52, +3.94, +1.9%). Also, JPM and GS, Wells Fargo (WFC 45.30, -1.41, -3.0%) and Johnson & Johnson (JNJ 132.50, -2.21, -1.6%) beat earnings estimates, but shares finished noticeably lower.

Despite the mostly positive results, the broader market was seemingly uninterested as the good news may have already been priced in. An understanding that earnings from big tech companies are just around the corner may have also kept some buyers sidelined.

Price action picked up after Trump said that there is still a “long way to go” with China on trade. This helped drive stocks to session lows, although losses were only modest. At its low, the S&P 500 was only down 0.4% and was able to hold above the 3000 level.

CURRENCY MARKET WRAP 

As of Mon Jul 16th, Singapore Time zone UTC+8

Dollar Index +0.02%, 96.93
USDJPY, +0.02%, $107.9
EURUSD, -0.03%, $1.1260
GBPUSD, -0.04%, $1.2517  
USDCAD, +0.03%, $1.3049
AUDUSD, -0.06%, $0.7038  
NZDUSD, +0.08%, $0.6722

Foreign exchange markets had a quiet outing on Monday. The U.S. Dollar edged higher, with its potential upside limited by expectations the Federal Reserve will cut interest rates at the upcoming policy meeting. The yield on the 10-year Treasury note has fallen by nearly 60 basis points this year to 2.096% on Monday. Investors expect the Fed to reduce its key rate by 25 basis points and make another cut in September.

Sterling hovered close to six-month lows, with traders still nervous about a loss of momentum in the UK economy, the prospect of an interest rate cut and a new prime minister.

STOCK MARKET WRAP 

S&P500, +0.02%, 3,014.30
Nasdaq, +0.17%, 8,258.18
Nikkei Futures, +0.21%, 21,593.0

Market eked out small gains on Monday. The major averages struggled to find direction, but the S&P 500 (+0.02%), Dow Jones Industrial Average (+0.1%), and Nasdaq Composite (+0.2%) did manage to set new record closes.

Facebook Inc. faced its latest Washington crisis Monday, with Treasury Secretary Steven Mnuchin joining a parade of policy makers and politicians who’ve bashed its proposed cryptocurrency. In a press conference Monday, Treasury Secretary Steven Mnuchin said Facebook’s proposed digital currency, Libra, “could be misused by money launderers and terrorist financiers” and that it was a “national security issue.”, demonstrating the hurdles the company must overcome to ever make the token a reality.

In earnings news, Citigroup (C 71.73, -0.04, -0.1%)  beat analysts’ estimates for quarterly profit as a tight lid on costs and strength in consumer lending helped the third-largest U.S. bank counter weakness in its trading business. However, trading revenues were weak and the bank reported tighter net interest margins. On a related note, shares of JPMorgan Chase (JPM 113.90, -1.40, -1.2%), Wells Fargo (WFC 46.70, -0.66, -1.4%), and Goldman Sachs (GS 211.58, -2.36, -1.1%) each lost over 1.0% ahead of the companies’ results tomorrow morning.

Shares of General Electric Co. dropped after UBS backed away from its bullish stance, citing the stock’s significant outperformance in the face of continued power market weakness and a significant decline in interest rates. GE is scheduled to report second-quarter results on July 31, before the market opens.

Semiconductor company Broadcom (AVGO 288.34, +2.95, +1.0%) outperformed on reports that acquisition talks with Symantec (SYMC 22.84, -2.73, -10.7%) broke down. The China-sensitive industry might have also drawn some interest after Beijing reported better-than-expected data for industrial production, fixed asset investment, and retail sales for June.