U.S. indices started Tuesday under pressure but rebounded off their lows following a report that China was considering a deal to purchase more U.S. agricultural goods ahead of the next trade meeting. Bond yields rallied into the close. Shares in the Telecommunication Services (+1.91%), Banks (+1.3%) and Energy (+1.29%) sectors traded higher while shares in the Commercial & Professional Services (-2.13%), Consumer Services (-1.92%) and Household & Personal Products (-1.82%) sectors saw downside pressure. Looking at crude oil, prices rallied to intraday highs before tanking after President Trump fired U.S. security adviser John Bolton which may ease tensions between the U.S. and Iran regarding Oil transport in the Strait. On the economic data front, the NFIB Small Business Optimism fell to 103.1 (expected 103.5) in August, the lowest level in four months, from 104.7 in July. Looking into Wednesday, traders will be eyeing key economic data regarding mortgage applications, PPI and wholesale inventories before the market opens. The S&P 500 (2,979.39) trades above its 20d moving average (2,913.25 – positive slope) and its 50d moving average (2,948.31 – positive slope).
European markets are expected to start on a positive note.
Foreign Exchange
The US dollar was bullish against most of its major pairs on Tuesday with the exception of the CAD and CHF. On the economic data front, US NFIB Small Business Optimism decreased to 103.1 (expected 103.5) in August compared to 104.7 in July, reaching its lowest in four months. Looking into Wednesday, traders will be eyeing key economic data regarding mortgage applications, PPI and wholesale inventories before the market opens.
The Euro was bearish against most of its major pairs with the exception of the JPY. In Europe, UK ILO unemployment rate fell to 3.8% for the May-July period from 3.9% in the previous period. It was expected to be flat. French industrial production increased by 2.3% in July (+0.5% expected) after a 2.3% slide a month earlier.
The Australian dollar was mostly bullish against its major pairs with the exception of the CAD and CHF.
Commodities
After the close of Wall Street, WTI Crude Future (OCT 19) was about flat to $57.56. The contract was above its 20D MA (@ $55.68) and above its 50D MA (@ $56.24).
Gold was down $12.3 to $1486.9. The precious metal was below its 20D MA (@ $1519) and above its 50D MA (@ $1469).
Copper Future (DEC 19) on Comex was about flat to 262.25c/lb. The contract was above its 20D MA (@ 258.87c) and below its 50D MA (@ 263.86c). In Europe, the London Metal Exchange reported its copper inventories increased 100 tons to 310450 tons