General Market Comment
US indices closed lower on Wednesday, pressured by shares in the Semiconductors & Semiconductor Equipment (-2.4%), Consumer Services (-1.83%) and Software & Services (-1.58%) sectors. On the economic data front, MBA mortgage applications decreased by 4.9% in the week ending June 22 from +5.1% previously. In addition, wholesale inventories increased by 0.5% in a preliminary estimate in May, above the expectation of +0.2%, from +0.1% in the previous month. Furthermore, durable goods orders decreased by 0.6% in a preliminary estimate in May (estimated -1%) from -1% in the prior month. Finally, pending home sales decreased by 0.5% in May, below the expectation of +0.5%, from -1.3% in the last month. The S&P 500 (2,699.63) is below both its 20d moving average (2,755.60 – flat) and 50d moving average (2,716.81 – flat). European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Wednesday. On the economic data front, MBA mortgage applications decreased by 4.9% in the week ending June 22 from +5.1% previously. In addition, wholesale inventories increased by 0.5% in a preliminary estimate in May, above the expectation of +0.2%, from +0.1% in the previous month. Furthermore, durable goods orders decreased by 0.6% in a preliminary estimate in May (estimated -1%) from -1% in the prior month. Finally, pending home sales decreased by 0.5% in May, below the expectation of +0.5%, from -1.3% in the last month.
The Euro was bearish against its major pairs with exception of the NZD and the GBP. Eurozone M3 money supply growth was 4% in May vs +3.8% the month before. According to Nationwide, UK house prices rose 0.5% in June (+0.2% expected) vs -0.2% in May.
The Australian dollar was mixed against its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (AUG 18) was up $1.8 to $72.37. The contract was above its 20D MA (@ $66.54) and above its 50D MA (@ $68.14). The US Department of Energy reported that, for the week ended 22 June, crude oil inventories fell 9891k barrels compared to the previous week.
Gold was down $6.2 to $1252.9. The precious metal was below its 20D MA (@ $1284) and below its 50D MA (@ $1300). The 14d RSI below 30 (24.12) indicates gold was oversold.
Copper Future (SEP 18) on Comex was down 1.9c to 299.65c/lb. The contract was below its 20D MA (@ 315.38c) and below its 50D MA (@ 313.17c). In Europe, the London Metal Exchange reported its copper inventories decreased 4325 tons to 298775 tons.