CURRENCY MARKET WRAP
As of Tue 3rd Dec, Singapore Time zone UTC+8
U.S. Dollar Index, -0.42%, 97.89
USDJPY, -0.47%, $109.03
EURUSD, +0.53%, $1.1076
GBPUSD, +0.21%, $1.2940
USDCAD, +0.16%, $1.3306
AUDUSD, +0.78%, $0.6818
NZDUSD, +1.03%, $0.6498
U.S. session began relatively unchanged, but selling quickly ensued and accelerated after the ISM Manufacturing Index for November declined to 48.1% (consensus 49.2%) from 48.3% in October. The deceleration in activity was disappointing but was especially disheartening after manufacturing PMIs from China and Europe showed improvement, as a result, Dollar weakness was broad based.
Dampening risk sentiment was Trump declaring he will restore tariffs on steel and aluminum imports from Argentina and Brazil after the countries devalued their currencies. On a related note, reports continued to present the existing tariffs on Chinese imports and the Hong Kong Human Rights and Democracy Act as roadblocks to a trade deal.
Elsewhere, longer-dated U.S. Treasuries succumbed to increased selling pressure after the Financial Times reported that the Fed is considering a rule to allow inflation to exceed its 2.0% target. The 2-yr yield increased two basis points to 1.84%, and the 10-yr yield increased six basis points to 1.84%. The U.S. Dollar Index declined 0.42% to 97.89.
Christine Lagarde asked EU lawmakers on Monday to give her time to learn the ropes of her new job and to reshape the ECB’s monetary policy in what is likely to be a lengthy policy review. The former International Monetary Fund chief has promised an overarching review of ECB business ranging from how it defines its inflation objective to whether it includes a fight against climate change among its responsibilities.
STOCK MARKET WRAP
S&P500, -0.86%, 3,113.87
Nasdaq, -1.12%, 8,567.99
Nikkei Futures, -0.71%, 23,213.0
Leading the decline were the S&P 500 real estate (-1.8%), industrials (-1.6%), and information technology (-1.4%) sectors, all of which fell more than 1.0%. The consumer staples (+0.3%) and energy (+0.03%) sectors finished in positive territory, with the latter finding support from higher oil prices ($55.99, +0.82, +1.5%).
Other underperforming stocks included those in the trade-sensitive Philadelphia Semiconductor Index (-1.5%) and many highly-valued growth stocks like Roku (ROKU 136.07, -24.30, -15.2%). The latter was downgraded to Underweight at Morgan Stanley with a $110 price target for valuation reasons.
Consumer spending appeared in good shape on this Cyber Monday. Adobe Analytics estimated online sales would total $9.4 billion by the end of today after Black Friday registered a record $7.4 billion in online sales.