CURRENCY MARKET WRAP
As of Tue 4th Dec, Singapore Time zone UTC+8
U.S. Dollar Index, -0.17%, 97.72
USDJPY, -0.33%, $108.64
EURUSD, +0.02%, $1.1082
GBPUSD, +0.44%, $1.2994
USDCAD, -0.12%, $1.3292
AUDUSD, +0.43%, $0.6848
NZDUSD, +0.22%, $0.6517
Dollar was offered after Trump suggested a trade deal with China might be better if it waited until after the 2020 election. The negative bias formed before the open as Trump spoke to reporters at the NATO summit in London. Trump may or may not have been using a negotiating tactic, but the negative-sounding headline understandably provided an excuse to take some profits off the table given the uncertainty that remains regarding a deal and the Dec. 15 tariffs.
On a separate trade front, the USTR proposed that $2.4 billion of French imports be taxed up to 100% in response to the country passing a digital tax law that allegedly targets U.S. tech companies. The Wall Street Journal reported that this amounts to less than 5% of the goods that were imported from France in 2018.
The 2-yr yield dropped eight basis points to 1.54%, and the 10-yr yield dropped 13 basis points to 1.71%. The U.S. Dollar Index declined 0.1% to 97.74. WTI crude increased 0.3%, or $0.14, to $56.13/bbl.
As expected, the RBA board, at its final meeting for the year, kept rates on hold at the historic low of 0.75 per cent. Rebounding house prices have painted the Reserve Bank into a tight corner, potentially undermining the prospects of further interest rate cuts.
STOCK MARKET WRAP
S&P500, -0.66%, 3,093.20
Nasdaq, -0.55%, 8,520.64
Nikkei Futures, -1.83%, 23,130.0
Some follow-through selling ensued shortly after the open, but selling pressure was kept in check for the rest of the session. Weakness was found primarily in the cyclical sectors, most notably in the S&P 500 energy (-1.6%) and financials (-1.3%) sectors. The Dow Jones Transportation Average fell 2.2%.
Conversely, the real estate (+0.7%) and utilities (+0.5%) sectors were the lone sectors to finish in positive territory, predominately due to the safety trade in Treasuries that sent yields sharply lower.
Corporate news was relatively light, but a notable story included Cleveland-Cliffs (CLF 7.51, -0.90, -10.7%) agreeing to acquire AK Steel (AKS 3.01, +0.12, +4.2%) for $1.1 billion in an all-stock transaction.