CURRENCY MARKET WRAP
As of Wed 15 Jan, Singapore Time zone UTC+8
U.S. Dollar Index, +0.05%, 97.39
USDJPY, -0.08%, $109.85
EURUSD, -0.06%, $1.1128
GBPUSD, +0.24%, $1.3022
USDCAD, +0.09%, $1.3068
AUDUSD, -0.12%, $0.6895
NZDUSD, -0.36%, $0.6607
U.S. CPI for December brought good news in relative terms, as there weren’t any overshoots compared to expectations. Total CPI was up 0.2% m/m, as expected, while core CPI, which excludes food and energy, was up a softer-than-expected 0.1% (consensus +0.2%). Core CPI has been up 2.3% yr/yr for three straight months, so the inflation rate isn’t running away from the Fed, which seems to have adopted a willingness to let inflation run above its longer-run goal for a bit before moving on rates; moreover, the CPI data takes a backseat to the PCE price data as the Fed’s preferred inflation gauge, and the latest report showed core-PCE inflation up just 1.6% yr/yr.
In Washington, Lawyers for Michael Flynn, Trump’s former national security adviser, on Tuesday said in a court filing that he would seek to withdraw his guilty plea in former Special Counsel Robert Mueller’s investigation. Flynn pleaded guilty in late 2017 to lying to the FBI about interactions with Russia’s ambassador to the United States in the weeks before Trump took office but has since argued that his rights were violated.
U.S. Treasuries finished the quiet session on a mostly higher note. The 2-yr yield was unchanged at 1.58%, and the 10-yr yield declined three basis points to 1.82%. The U.S. Dollar Index finished flat at 97.39. WTI crude increased 0.3%, or $0.18, to $58.30/bbl.
STOCK MARKET WRAP
S&P500, -0.15%, 3,283.15
Nasdaq, -0.24%, 9,251.33
Nikkei Futures, -0.24%, 23,897.5
The day began with JPMorgan Chase (JPM 138.80, +1.60, +1.2%), Citigroup (C 81.91, +1.26, +1.6%), and Delta Air Lines (DAL 61.45, +1.96, +3.3%) providing investors with better-than-expected earnings results, while Wells Fargo (WFC 49.32, -2.79, -5.4%) missed top and bottom-line estimates due to higher expenses.
The results contributed to noticeable price changes in the stocks, but the price action in the broader market was relatively tight-ranged amid some buyer exhaustion. At its high, the S&P 500 was up just 0.2%, and it was down just 0.3% after Bloomberg reported that existing tariffs on Chinese imports will remain for at least ten months.
From a sector standpoint, the S&P 500 information technology (-0.6%) and real estate (-0.5%) sectors were laggards, while the health care (+0.5%) and utilities (+0.3%) sectors finished with modest gains. Apple (AAPL 312.68, -4.28, -1.4%) weighed on the tech sector after shares were downgraded to Underweight from Neutral at Atlantic Equities.
In other corporate news, Boston Scientific (BSX 42.66, -2.81, -6.2%) issued downside revenue guidance. A recent study indicated that Walt Disney’s (DIS 145.20, +1.32, +0.9%) streaming app may have been downloaded more than 40 million times. Visa (V 196.05, +0.72, +0.4%) agreed to acquire Plaid for $5.3 billion.