CURRENCY MARKET WRAP
As of Tue Sep 17th, Singapore Time zone UTC+8
U.S. Dollar Index, +0.60%, 98.64
USDJPY, +0.37%, $108.15
EURUSD, -0.72%, $1.1004
GBPUSD, -0.56%, $1.2426
USDCAD, +0.21%, $1.3242
AUDUSD, -0.23%, $0.6862
NZDUSD, -0.69%, $0.6341
China’s industrial growth slowed to new 17-year low in August, even before new US trade war tariffs took effect. Industrial production including manufacturing, mining and utilities, grew at 4.4% (consensus 5.2%) last month, down from 4.8% in July, which in itself was the lowest rate since February 2002.
Drone attack on Saudi Arabia knocked about 5.7 million barrels per day out of production, leading to the biggest one-day gain in WTI crude ($62.88/bbl, +$8.00, +14.6%) since 2008. Saudi Arabia expected to restore about a third of lost production on Monday, while normal production might take “weeks not days,” according to sources from Reuters. Some angst revolved around a possible retaliatory attack from the U.S. and Saudi Arabia on Iran. It wasn’t confirmed if Iran was the aggressor, but the U.S. was quick to implicate Tehran while a preliminary investigation found the weapons used in the strike originated from Iran, according to al-Riyadh.
Defensive positioning was taken, though, with traditional safe-haven assets like U.S. Treasuries and gold finishing higher. The 2-yr yield declined three basis points to 1.76%, and the 10-yr yield declined six basis points to 1.84%. The U.S. Dollar Index advanced 0.6% to 98.64.
STOCK MARKET WRAP
S&P500, -0.31%, 2,997.96
Nasdaq, -0.28%, 8,153.54
Nikkei Futures, +0.31%, 21,762.5
The S&P 500 declined 0.31% on Monday after an attack on Saudi Arabia’s oil refineries sent oil prices up nearly 15% and escalated geopolitical tensions. The Dow Jones Industrial Average lost 0.5%, and the Nasdaq Composite lost 0.28%. The Russell 2000 increased 0.4%, helped by big gains in the oil-sensitive stocks.
Yesterday’s winning groups included the S&P 500 energy sector (+3.3%) and iShares Dow Jones US Aerospace & Defense ETF (ITA 229.87, +2.35, +1.0%). The S&P 500 real estate (+1.0%) and utilities (+0.1%) sectors also finished higher, helping ease the losses from the materials (-1.6%), consumer discretionary (-1.3%), and consumer staples (-1.0%) sectors.