CURRENCY MARKET WRAP
As of Fri Sep 6th, Singapore Time zone UTC+8
U.S. Dollar Index, -0.08%, 98.37
USDJPY, +0.57%, $107.00
EURUSD, +0.01%, $1.1036
GBPUSD, +0.59%, $1.2325
USDCAD, +0.03%, $1.3228
AUDUSD, +0.24%, $0.6813
NZDUSD, +0.22%, $0.6374
In trade, United States and China have agreed to return to the negotiating table in Washington to discuss trade. It will be the first face-to-face meeting between the two sides since the trade war’s rapid escalation in recent weeks.
The trade meeting, which was announced by China, is expected to take place in Washington in early October. Both countries said they will continue talking ahead of that in-person meeting. The countries agreed to “create good conditions for negotiation,” China’s Commerce Ministry said. US trade authorities said that deputy-level meetings this month will “lay the groundwork for meaningful progress.”
The positive bias was reinforced heading into the U.S. open as the ADP Employment Change Report (195,000 in August vs consensus 150,000) for August and the weekly initial claims report (217,000 vs consensus 214,000) provided a healthy insight into the U.S. labor market. Better-than-expected factory orders (1.4% vs consensus 1.0%) and non-manufacturing activity (2.3% vs consensus 2.2%) for August solidified the risk-on sentiment that was upheld throughout the rest of the session.
Treasury yields took a leg higher soon after the release of the ISM Non-Manufacturing Index for August, which increased to 56.4% (consensus 54.0%) from 53.7% in July. Yesterday’s data, in aggregate, erased the small possibility in the market’s mind for a 50-basis points rate cut at the September FOMC meeting, according to the CME FedWatch Tool. The still expects a 25-bps cut amid decent data.
The 2-yr yield increased ten basis points to 1.54%, and the 10-yr yield increased 11 basis points to 1.57%. The U.S. Dollar Index was relatively unchanged at 98.37. WTI crude inched up 0.2%, or $0.10, to $56.31/bbl.
STOCK MARKET WRAP
S&P500, +1.30%, 2,976.00
Nasdaq, +1.75%, 8,116.83
Nikkei Futures, +2.19%, 21,153.0
U.S. stocks rallied for the second straight day on Thursday, buoyed by news that the U.S. and China will hold trade talks next month and by encouraging economic data that eased recessionary concerns. The S&P 500 (+1.3%), Dow Jones Industrial Average (+1.4%), and Nasdaq Composite (+1.75%) each closed above their 50-day moving averages. The Russell 2000 advanced 1.8%.
The trade-sensitive S&P 500 information technology (+2.1%), consumer discretionary (+1.9%), and industrials (+1.8%) sectors were among today’s leaders. The financials sector (+1.9%) also outperformed amid a sell-off in the U.S. Treasury market that sent yields noticeably higher. The defensive-oriented, and rate-sensitive, utilities (-1.2%), real estate (-0.9%), and consumer staples (-0.7%) sectors finished lower.