CURRENCY MARKET WRAP
As of Thu Aug 22, Singapore Time zone UTC+8
Dollar Index +0.11%, 98.30
USDJPY, +0.35%, $106.61
EURUSD, -0.09%, $1.1091
GBPUSD, -0.31%, $1.2132
USDCAD, -0.21%, $1.3289
AUDUSD, +0.09%, $0.6784
NZDUSD, -0.18%, $0.6405
Price action in markets was relatively muted leading up to the release of the FOMC Minutes, which had a noticeable effect on the U.S. Treasury market. The minutes indicated different viewpoints on where the fed funds rate should be (some called for a 50-basis points rate cut, while others favored no change). In addition, it was said in the minutes that the Fed will remain “flexible” and focused on the implications of incoming data for the outlook.
The minutes produced some knee-jerk selling on the shorter-end of the yield curve, causing some curve-flattening. The 2-yr yield increased six basis points to 1.57%, and the 10-yr yield increased two basis points to 1.58%. At one point before the close, the 2s10s spread briefly inverted again. The U.S. Dollar Index increased 0.1% to 98.29. WTI crude declined 0.9%, or $0.53, to $55.65/bbl.
In trade, Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.
STOCK MARKET WRAP
S&P500, +0.82%, 2,924.43
Nasdaq, +0.90%, 8,020.21
Nikkei Futures, +0.1%, 20,717.50
S&P 500 increased 0.8% on Wednesday in a broad-based advance. Upbeat results and reassuring guidance from Target (TGT 103.00, +17.47, +20.4%) and Lowe’s (LOW 108.00, +10.13, +10.4%) reinforced the notion that the U.S. consumer remains in good shape, while investors parsed the FOMC minutes from the July meeting.
All 11 S&P 500 sectors finished in positive territory, with the consumer discretionary (+1.8%) and information technology (+1.2%) sectors gaining over 1.0%. The consumer staples (+0.3%) and communication services (+0.4%) sectors rose modestly.