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.