CURRENCY MARKET WRAP
As of Tue, May 14, Singapore Time zone UTC+8
Dollar Index +0.02%, 97.35
USDJPY, -0.66%, $109.21
EURUSD, -0.07%, $1.1228
GBPUSD, -0.31 %, $1.2960
USDCAD, +0.48%, $1.3478
AUDUSD, -0.74%, $0.6948
NZDUSD, -0.39%, $0.6573
Markets were in risk-aversion mode on Monday, the 2-yr yield dropped six basis points to 2.18%, and the 10-yr yield dropped five basis points to 2.41%. Dollar Index remained firm at 97.35.
Markets were offered after China increased the tariff rate on $60 billion of U.S. imports to a floating range of 5-25%, from 5-10%, starting June 1. Prior to the news, China said it would “not surrender” to external pressure. There was also speculation that Beijing could reduce its consumption of other U.S. goods and services, including orders from Boeing (BA 337.37, -17.30, -4.9%). Although the amount of goods China imports from the U.S. is substantially less than the goods the U.S. imports from China, the retaliatory actions fuelled concerns about a protracted trade war.
S&P500, -2.41%, 2,811.87
Nasdaq, -3.46%, 7,324.13
Nikkei Futures, -1.92%, 20,768.0
U.S. stocks sold off on Monday, as trade tensions escalated after China retaliated with a tariff rate hike on U.S. imports. The 2.41% drop in the S&P 500 sent it back near the 2800 level in a broad-based effort to de-risk amid global growth concerns. Growth concerns were manifested in the underperformance of the S&P 500 information technology (-3.7%), consumer discretionary (-3.0%), financials (-2.9%), and industrials (-2.8%) sectors. The Philadelphia Semiconductor Index (-4.7%), and oil ($61.08/bbl, -$0.58, -0.9%) and copper ($2.72/lb, -$0.05, -1.8%) prices, also succumbed to the growth worries.
In corporate news, Apple (AAPL 185.72, -11.72) fell 5.8% on increased trade tensions and a Supreme Court ruling that would allow iPhone users to pursue an App Store antitrust case. Teva Pharmaceutical (TEVA 12.23, -2.13) fell 14.8% after more than 40 states sued the company, accusing it of price-fixing with 19 other drug companies. Uber (UBER 37.10, -4.47) also stood out, losing 10.8% to extend its losses since its IPO on Friday.