U.S. indices rallied on Tuesday lifted by shares in the Semiconductors & Semiconductor Equipment (+4.17%), Capital Goods (+2.42%) and Technology Hardware & Equipment (+2.13%) sectors. President Donald Trump said he will meet with Chinese president Xi Jinping, at the upcoming G-20 summit. Sentiment was also boosted with anticipation that the Fed will ease monetary policy later this year. On the economic data front, housing starts dropped 0.9% MoM to 1.269M in May (vs 1.239M estimated) while building permits rose 0.3% MoM to 1.294M (vs 1.292M expected). The S&P 500 (2,917.75) stays above its 20d moving average (2,841.21 – positive slope) and its 50d moving average (2,843.65 – positive slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Tuesday with the exception of the EUR and CHF. On the economic data front, Housing starts for May fell to 1.27M (1.24M estimate) compared to a revised 1.28M in April while building permits remained in-line at 1.29M.
The Euro was bearish against all of its major pairs. In Europe, the ECB president, Mario Draghi said that additional stimulus will be needed if the economic outlook does not improve in the euro-zone. Separately, the euro-zone CPI index growth was confirmed at 1.2% in May YoY, its lowest increase on that basis since April 2018, after being up by 1.7% a month earlier. Finally, EU27 new car registrations slightly increased by 0.1% in May after a 0.4% decline in April. The German ZEW investor expectations index plunged to -21.1 in June (-5.6 expected) from -2.1 in May.
The Australian dollar was bullish against all of its major pairs with the exception of the NZD.
Commodities
After the close of Wall Street, WTI Crude Future (JUL 19) was up $2.1 to $54.07. The contract was below its 20D MA (@ $55.13) and below its 50D MA (@ $60.1).
Gold was up $6.7 to $1346.3. The precious metal was above its 20D MA (@ $1315) and above its 50D MA (@ $1296).
Copper Future (SEP 19) on Comex was up 5.7c to 270.3c/lb. The contract was above its 20D MA (@ 266.52c) and below its 50D MA (@ 277.92c). In Europe, the London Metal Exchange reported its copper inventories decreased 600 tons to 250750 tons.