General Market Comment 22.08.19

U.S. indices closed higher on Wednesday lifted by shares in the Retailing (+2.33%), Consumer Durables & Apparel (+1.95%) and Technology Hardware & Equipment (+1.24%) sectors. Strong quarterly results from retailers such as Target and Lowe’s helped boost investor sentiment. The Federal Reserve’s latest FOMC meeting minutes showed that officials saw the interest-rate cut as insurance against further downside risks from weak global growth and trade policy uncertainty, while they “generally agreed that it was important to maintain optionality in setting the future target range for the federal funds rate”. On the economic data front, existing home sales rose 2.5% MoM to an annualized rate of 5.42M units in July (vs 5.40M expected). The S&P 500 (2,924.43) trades below its 20d moving average (2,926.55 – negative slope) and below its 50d moving average (2,946.85 – flat slope).

European markets are expected to open on a flat note.

Foreign Exchange

The US dollar was bullish against all of its major pairs on Wednesday with the exception of the AUD and CAD. On the economic data front, MBA Mortgage Applications decreased by 0.9% in week ending August 16 vs. a 21.7% increase in the prior week.

The Euro was bullish against all of its major pairs with the exception of the AUD and CAD. In Europe, the UK public sector net borrowing ex Banking Groups was a £1.3B deficit in July vs a £3.26B excess a year earlier. 

The Australian dollar was bullish against all of its major pairs with the exception of the CAD.

Commodities

After the close of Wall Street, WTI Crude Future (OCT 19) was about flat to $55.85. The contract was above its 20D MA (@ $55.32) and below its 50D MA (@ $56.26). The US Department of Energy reported that, for the week ended 16 August, crude oil inventories fell 2732k barrels compared to the previous week.

Gold was down $4.9 to $1502.2. The precious metal was above its 20D MA (@ $1475) and above its 50D MA (@ $1431).

Copper Future (DEC 19) on Comex was about flat to 258.65c/lb. The contract was below its 20D MA (@ 262.4c) and below its 50D MA (@ 266.77c). In Europe, the London Metal Exchange reported its copper inventories decreased 25 tons to 329575 tons.