US indices closed lower on Wednesday, pulling back from record highs after Reuters reported a phase one trade deal between China and the U.S. might not be completed by the end of 2019. Shares in the Automobiles & Components (-2.51%), Transportation (-1.67%) and Materials (-1.18%) sectors saw the most pressure.
On the economic data front, Mortgage Applications fell -2.2% for the week ending November 15th, down from a rise of 9.6% the prior week. The Federal Open Market Committee Meeting Minutes ended on the note that the Fed would hold rates here and that rates were cut due to the trade war, moreover they see moderate growth in the economy along with strong labor.
Later today, economists expect Initial Jobless Claims to be lower for the week ending November 16th, compared to the prior week and Continuing Claims for November 9th is anticipated to be in-line with the week before. Economists also expect Leading Index data for October and an increase in existing Home Sales for October.
European markets are expected to start on a negative note.
Foreign Exchange
The US dollar was flat to bullish against most of its major pairs on Wednesday, with the exception of the JPY. On the economic data front, Mortgage Applications fell -2.2% for the week ending November 15th, down from a rise of 9.6% the prior week. The Federal Open Market Committee Meeting Minutes ended on the note that the Fed would hold rates here and that rates were cut due to the trade war, moreover they see moderate growth in the economy along with strong labor. On Thursday, economists expect Initial Jobless Claims to be lower for the week ending November 16th, compared to the prior week and Continuing Claims for November 9th is anticipated to be in-line with the week before. Economists also expect Leading Index data for October and increase in existing Home Sales for October.
The Euro was bearish against most of its major pairs with the exception of the NZD, AUD and CAD. In Europe, the German October Producer Price Index declined 0.6% on year (-0.4% expected) vs -0.1% in September. Luis de Guindos, Vice-President of the ECB said: “While the low interest rate environment supports the overall economy, we also note an increase in risk-taking which warrants continuous and close monitoring” and “Authorities should use available tools to address the build-up of vulnerabilities where possible.”
The Australian dollar was bearish against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (JAN 20) was up $1.7 to $57.07. The contract was above its 20D MA (@ $56.5) and above its 50D MA (@ $55.46). The US Department of Energy reported that, for the week ended 15 November, crude oil inventories increased 1379k barrels compared to the previous week.
Gold was about flat to $1471.6. The precious metal was below its 20D MA (@ $1483) and below its 50D MA (@ $1491).
Copper Future (MAR 20) on Comex was down 1.1c to 265.8c/lb. The contract was below its 20D MA (@ 267.37c) and above its 50D MA (@ 264c). In Europe, the London Metal Exchange reported its copper inventories increased 1475 tons to 222425 tons.