General Market Comment
US indices closed mixed on Wednesday. Shares in the Commercial & Professional Services (-2.51%), Utilities (-2.12%) and Telecommunication Services (-1.35%) sectors closed on a negative note while shares in the Banks (+2.28%), Automobiles & Components (+2.01%) and Diversified Financials (+1.38%) sectors gained traction. On the economic data front, current account deficit narrowed to $101.5B in 2Q (forecasted $103.4B) compared to $121.7B in 1Q. Also, housing starts rose to 1.282M units in August (expected 1.238M) from 1.174M units in July, while building permits fell to 1.229M in August (estimated 1.31M) vs. 1.303M a month earlier. The S&P 500 (2,907.95) remains above its 20d moving average (2,890.18 – positive slope) and 50d moving average (2,851.62 – positive slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bearish against most of its major pairs on Wednesday with the exception of the CHF. On the economic data front, MBA mortgage applications improved by 1.6% in week ended September 14th from a decrease of 1.8% in the prior week. In other news, current account deficit improved to $101.5B in 2Q (forecasted $103.4B) compared to $121.7B in the last quarter. Also, housing starts reached 1.282M units in August (expected 1.238M) from 1.174M units in July. Finally, building permits diminished to 1.229M in August (estimated 1.31M) vs. 1.303M a month earlier.
The Euro was bullish against most of its major pairs with the exception of the AUD, the NZD and the CAD. In Europe, EU27 new car registrations jumped by 31.2% in August after a 10.5% rise a month earlier. UK CPI rose 0.7% in August after being flat in July. Economists anticipated a 0.5% increase.
The Australian dollar was higher against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (OCT 18) was up $1.3 to $71.14. The contract was above its 20D MA (@ $69.01) and above its 50D MA (@ $67.71). The US Department of Energy reported that, for the week ended 14 September, crude oil inventories fell 2057k barrels compared to the previous week.
Gold was up $5.6 to $1204. The precious metal was above its 20D MA (@ $1200) and below its 50D MA (@ $1208).
Copper Future (DEC 18) on Comex was about flat to 272.75c/lb. The contract was above its 20D MA (@ 267.72c) and below its 50D MA (@ 272.8c). In Europe, the London Metal Exchange reported its copper inventories increased 3450 tons to 217600 tons.