Currency Market Wrap

As of Thu, May 30, Singapore Time zone UTC+8

Dollar Index +0.18%, 98.13
USDJPY, +0.19%, $109.57
EURUSD, -0.29%, $1.1136
GBPUSD, -0.23%, $1.2629
USDCAD, +0.19%, $1.3514
AUDUSD, -0.10%, $0.6919
NZDUSD, -0.45%, $0.6514

Contributing to the day’s risk-aversion were Chinese state media suggesting that Beijing could use its dominant position in rare earth minerals to restrict exports in a trade war against the U.S. Although it was not a new claim, investors continued to seek safety in Treasuries with few signs of trade progress.

At one point during the day, the 3-month yield was 14 basis points higher than the 10-yr yield, which was its biggest difference since the financial crisis and helped feed into the persisting growth concerns. Demand for U.S. Treasuries did lose traction during the afternoon, though, bringing yields slightly higher from session lows. The 2-yr yield finished four basis points lower at 2.08%, and the 10-yr yield finished three basis points lower at 2.23%. The U.S. Dollar Index increased 0.18% to 98.13. WTI crude declined 0.5% to $58.84/bbl.

Bank of Canada held key interest rates steady at 1.75%, citing accumulating evidence the economy was showing signs of slowing down in the latter half of last year and into the start of this one, before picking up in the second quarter of 2019. The BoC saw the escalating trade war as a problem for global growth and warned that China restrictions have a direct impact on Canada’s exports.

Stock Market Wrap

S&P500, -0.69%, 2,783.02
Nasdaq, -0.85%, 7,216.86
Nikkei Futures, -1.64%, 20,882.5

S&P 500 was down as much as 1.3% on Wednesday amid trade and growth concerns, while the advance in U.S. Treasuries helped widen a key inversion within the yield curve. A rebound in the last hour of action, however, helped the benchmark index finish lower by 0.69% and reclaim its 200-day moving average (2776) after falling below the key technical level during the day.

No S&P 500 sector finished higher, but the materials (-0.1%) and financials (-0.1%) sectors did finish just below their unchanged marks. The utilities (-1.3%) and real estate (-1.2%) sectors underperformed. The SPDR S&P Retail ETF (XRT 40.50, -0.92, -2.2%) was a notable laggard in the stock market following poor results and guidance from Abercrombie & Fitch (ANF 18.39, -6.62, -26.5%) and Canada Goose (GOOS 33.89, -15.13, -30.9%). General growth concerns also helped overlook upbeat results and guidance from Dick’s Sporting Goods (DKS 33.67, -2.11, -5.9%).