U.S. indices rallied on Thursday helped by shares in the Semiconductors & Semiconductor Equipment (+2.95%), Consumer Durables & Apparel (+2.54%) and Banks (+2.46%) sectors. Crude oil inventories slid 4.8 million barrels to 423 million barrels, the lowest since October 2018 which helped bid up Crude prices intraday. On the economic data front, ADP private employment increased 195K in August (vs. +148K estimated, +142K in July). Jobless claims increased to 217K in the week ending August 31 (vs. 215K estimated) from 216K in the prior week. Factory Orders increased 1.4% MoM in July (vs. +1.0% estimated). Finally, final readings of Markit Services PMI posted 50.7 in August (vs. 50.9 preliminary). The S&P 500 (2,976.00) trades above its 20d moving average (2,903.41 – positive slope) and breaks above its 50d moving average (2,945.19 – positive slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was lower against its major pairs on Thursday except for the CHF and JPY. On the economic data front, ADP Employment payrolls increased 195K in August above the 148K estimate compared to a revised 142K in July. Jobless claims increased to 217K in the week ending August 31 (215K estimate) compared to 216K in the prior week. July Factory Orders increased 1.4% (1.0% estimate) compared to the revised 0.5% increase in the previous month. Durable goods for July increased 2.0% (2.1% expected) compared to 2.1% in the prior reading. Finally, Markit Composite PMI fell to 50.7 in August hitting a new annual low compared to 50.9 in the last reading.
The Euro was under pressure against most of its major pairs with the exception of the CHF and JPY. In Europe, Germany factory orders dropped by 2.7% in July (-1.4% expected) after a 2.7% rise a month earlier (revised from +2.5%). Separately, the PMI construction index fell to 46.3 in August from 49.5 in July. UK new car registrations slid by 1.6% in August after a 4.1% decrease in July.
The Australian dollar was bullish against its major pairs with the exception of the GBP.
Commodities
After the close of Wall Street, WTI Crude Future (OCT 19) was about flat to $56.23. The contract was above its 20D MA (@ $55.17) and below its 50D MA (@ $56.34). The US Department of Energy reported that, for the week ended 30 August, crude oil inventories fell 4771k barrels compared to the previous week.
Gold was down $34.4 to $1518. The precious metal was below its 20D MA (@ $1520) and above its 50D MA (@ $1464).
Copper Future (DEC 19) on Comex was up 3.7c to 263.2c/lb. The contract was above its 20D MA (@ 258.43c) and below its 50D MA (@ 264.4c). In Europe, the London Metal Exchange reported its copper inventories decreased 4875 tons to 318675 tons.