U.S. indices closed down for the 4th time this week despite a positive opening reversing down on President Trump trade tariffs announcement. Banks (-3.4%), Consumer Durables & Apparel (-3.2%), Transportation (-2.55%) sectors fell sharply. President Trump tweeted: “We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to buy agricultural product from the U.S. in large quantities, but did not do so. (…) U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining $300B of goods and products coming from China.” The S&P 500 (2,932.05) trades below its 20d moving average (2,993.83 – negative slope) but stays above its 50d moving average (2,927.56 – positive slope).
European markets are expected to start on a negative note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Friday with the exception of the NZD and AUD. On the economic data front, the trade deficit reached $55.2B in June (estimated $54.6B) vs. $55.3B in the prior month. The unemployment rated reached 3.7% in July (estimated 3.6%) vs. 3.7% in the prior month. The University of Michigan Sentiment index was flat at 98.4 in July (estimated 98.5).
The Euro was bullish against all of its major pairs with the exception of the CHF and JPY. In Europe, the euro-zone retail sales increased by 1.1% in June (+0.3% expected) after a 0.6% decline a month earlier (revised from -0.3%). The UK PMI construction index was up to 45.3 in July (46 anticipated) from 46 in June.
The Australian dollar was bearish against all its major pairs with the exception of the AUD.
Commodities
After the close of Wall Street, WTI Crude Future (SEP 19) was up $1.3 to $55.21. The contract was below its 20D MA (@ $57.3) and below its 50D MA (@ $56.43).
Gold was down $4 to $1441.3. The precious metal was above its 20D MA (@ $1420) and above its 50D MA (@ $1382).
Copper Future (SEP 19) on Comex was down 9.8c to 256.75c/lb. The contract was below its 20D MA (@ 268.83c) and below its 50D MA (@ 268.09c). In Europe, the London Metal Exchange reported its copper inventories decreased 1200 tons to 286600 tons.