U.S. indices were under pressure on Wednesday with the Dow posting its fourth-largest point drop of all time pressured by shares in the Banks (-4.29%), Automobiles & Components (-4.22%) and Energy (-4.12%) sectors. The yield on the benchmark 10-year Treasury note broke below the 2-year rate, an event that has been a reliable indicator of economic recessions. On the economic data front, import price rose 0.2% MoM in July (vs. -0.1% expected) and export price increased 0.2% (vs. -0.1% expected). The S&P 500 (2,840.60) trades below its 20d moving average (2,951.43 – negative slope) and below its 50d moving average (2,943.46 – positive slope).
European markets are expected to start on negative note.<\/p>\n\n\n\n
Foreign Exchange<\/strong><\/p>\n\n\n\n The US dollar was bullish against all of its major pairs on Wednesday with the exception of the CHF and JPY. On the economic data front, MBA Mortgage applications increased by 21.7% in week ending August 9 vs. 5.35% in the prior month.
The Euro was bearish against all of its major pairs with the exception of the CAD and AUD. In Europe, the euro-zone GDP growth has been confirmed at 0.2% in 2Q in second reading vs +0.4% in 1Q. The German GDP fell by 0.1% in 2Q after a 0.4% growth in the previous quarter.
The Australian dollar was bearish against all its major pairs.<\/p>\n\n\n\n