Despite the upsurge in rhetoric, US traders seem hopeful that this weekend’s dinner between President’s Trump and Xi will deliver a thaw in the trade war. That’s a chance and it’s helped stocks stabilise and recover from the lows.
The US dollar was firmer across the board on the back of comments from Fed vice-chair Richard Clarida suggesting the Fed is still on track for more rate hikes. GBPUSD was under a little more pressure as forex traders worry Brexit has gone off the rails and gold and copper were lower.
Now for Fed chair Powell Wednesday.
Excuses abound today.An excuse for USD strength came in teh form of Fed vice chair Rich Clarida’s speech where he waxed positive about the US economy and the risks to the outlook. So the USD caught a bid and in DXY terms is back at 97.37. Euro is natraully down having lost 0.3% to 1.1295 while the Yen is off 0.2% with USDJPY at 113.77.
The Pound lost ground as trader fret Theresa May won’t get the Brexit deal through the Commons, so GBPUSD is at 1.2734. The Aussie was buoyed by the stocks positiveity it seems and is at 0.7225 – up a smidge on the day. The Kiwi did best of the major traded currencies with a 0.33% gain to 0.6791 while the CAD lost the same amount with USDCAD rising to 1.3295.
The other excuse was stocks. They could easily have got funky on concerns and tough talk about China and trade. But traders choose to pick the eyes out of Larry Kudlow’s little chat and hope for glasnost to break out at this weekend’s G20 meeting.
At the close the S&P 500 is up 0.37% to 2,682. What’s solid about that – besides ignoring the potential bear points – is that it was a good 27 points, about 1%, off the lows around 2,655. Likewise the Dow was strongly off the lows and closed with a 0.44% gain at 24,478 while the Nasdaq was 0.34% higher at 6,701.
Europe was lower, they missed the rallies in the physical markets. The CAC, DAX, FTSE, and FTSEMIB were all between 0.25% and 0.43% lower. Here in Australia after a solid test of support again yesterday the SPI is up 5 points at 5,739.
On commodity markets the USD move and Clarida speech seem to have knocked gold a littleand it’s back down at $1,214 off 0.6% with silver down a similar amount at $14.12. Copper dipped 0.92% to $2.73 a pound while oil too’d and fro’d and bounced around the same low for the thrid day in a row. WTI is at $51.93 and Brent is up 0.4% up 0.6% and 0.4% respectively.
Bitcoin is at $3,718 and US 2’s and 10’s contnued their remarkable stability and sit at 2.83% and 3.06% respectively.
On the day today we get a speech from RBNZ governor Orr, Construction work done in Australia, Gfk consumer confidence in Germany, money supply in Europe, stress tests and financial stability reports in the UK and then GDP in the US. Fed chair Powell is also speaking in New York
Macro stuff that affects everyone and everything – either today or eventually