CURRENCY MARKET WRAP
As of Wed Jul 31st, Singapore Time zone UTC+8
Dollar Index -0.03%, 98.05
USDJPY, -0.26%, $108.57
EURUSD, +0.13%, $1.1157
GBPUSD, -0.48%, $1.2158
USDCAD, -0.14%, $1.3147
AUDUSD, -0.34%, $0.6874
NZDUSD, -0.18%, $0.6617
U.S. Personal income increased 0.4% (consensus 0.4%) while personal spending rose 0.3% (consensus 0.3%) m/m in June. The PCE Price Index was up 0.1%, as expected, and the core PCE price Index, which excludes food and energy, jumped 0.2%, also as expected. On a yr/yr basis, the PCE Price Index held steady at 1.4% while the core PCE Price Index edged up to 1.6% from 1.5% in May. The report contained decent consumer data and tame inflation data, which is not all that surprising relative to recent data seen of late.
U.S. Treasuries finished slightly lower in another muted session. The 2-yr yield and the 10-yr yield increased one basis point each to 1.85% and 2.06%, respectively. The U.S. Dollar Index finished lower at 98.05.
In FOMC, the Fed is certain to slash rates later today. The question is whether it will cut by a typical 25bps or a more aggressive 50bps.Markets still assign a ~20% chance for the latter. Since more easing is priced in than the Fed is likely to deliver, the knee-jerk reaction in the Dollar may be higher. Whether that surge is sustained though, will depend on the signals policymakers send about the pace and depth of future cuts.
STOCK MARKET WRAP
S&P500, -0.26%, 3,013.18
Nasdaq, -0.46%, 7,952.47
Nikkei Futures, -0.31%, 21,503.0
The stock market wavered mostly in negative territory on Tuesday, leaving the S&P 500 (-0.26%), Dow Jones Industrial Average (-0.1%), and Nasdaq (-0.46%) with slight losses. The final standings reflected a mixed session with five S&P 500 sectors finishing higher and six sectors finishing lower. The utilities (-0.8%), information technology (-0.7%), and consumer discretionary (-0.7%) sectors underperformed, while the energy (+1.1%), real estate (+0.9%), and materials (+0.6%) sectors finished on top.
In other corporate news, Procter & Gamble (PG 120.41, +4.41, +3.8%)and Merck (MRK 83.27, +0.78, +1.0%) pleased investors with their earnings results. Pfizer (PFE 38.79, -2.66)fell 6.4% after the stock was downgraded at both Bank of America/Merrill Lynch and Morgan Stanley. Capital One (COF 91.21, -5.71)fell 5.9% after disclosing a data breach that affected over 100 million customers.