Axi | Sep 03, 2018 08:03
Originally published by AxiTrader h2 Market Summary (7.41am September 3 2018)/h2
The deal with Mexico hasn’t morphed into a new NAFTA the way markets hoped last week with President Trump telling congress to butt out and back off over the weekend. There is still a chance of a deal but only on his terms it seems.
So the chance of a reduction in tensions on this front has lessened while we also know Europe is readying to hit back if President Trump imposes tariffs on cars and goes after the bloc the way the Bloomberg interview suggested last week. And then we have China, pushed into a corner and unlikely to be able to do a deal.
Mid-terms here we come.
But that didn’t bother US markets too much. It was pre-holiday weekend trade of course. So it was thin. But the S&P managed to finish the week above 2,900 for the first time at 2,901 for the tiniest gain on the day. The Dow dipped 22 to 25,964 and the Nasdaq 100 was 0.16% higher at 7,654.
But it was very different in Europe – and to a lesser extent Asia – with the DAX down 1.04%, the CAC off 1.3%, while the FTSE 100 fell 1.1%. China was lower with the Shanghai Composite, CSI 300, and Hang Seng down 0.46%, 0.5%, and 0.98% which in part is why the ASX 200 was off 32 points Friday. SPI traders found 26 points of gains Friday night somehow and somewhere – we’ll see.
On forex markets the big mover was the US dollar, which knocked the euro back below 1.16 (Italy was put on negative outlook by ratings agency Fitch) and pole-axed the Aussie back below 72 cents for its lowest weekly close since mid-December 2016. They sits this morning at 1.1593 and 0.7189 respectively. GBP/USD is a little lower this morning after more revelations that Theresa May can’t give any more but the EU won’t accommodate it’s claims as they stand. GBP/USD is at 1.2920 while EUR/GBP is at 0.8960. The yen continues its fairly quiet trade and sits at 111.09.
The Canadian dollar is likely to come under some pressure given President Trump’s aggressive tweet and stance over the weekend – though it also has the Labor Day holiday today. It’s at 1.3062 in USD/CAD terms. The kiwi is at 0.6615 back toward the recent lows.
Emerging market currencies had a mild reprieve in trade Friday with the pressure released a little. But weekend comments from the IMF that money loaned and released is not to be used to prop up the peso is likely to re-intensify that pressure on the ARS and other markets this week.
On commodity markets gold is holding $1200 in a sign that maybe traders are paying attention to a little market funk. Copper fell again and is at $2.649 in HGc1 terms. Crude pulled back a bit with WTI pushing off resistance to fall to $69.80 while the Brent price sits at $77.64. Keep an eye on Libya though folks -the fighting has intensified again. Metals and Mining shares were lower Friday.
Elsewhere US 2's are at 2.63, the 10's are at 2.85 and the curve is around 22 points. Bitcoin is at $7,281 as its rally holds, and strengthens.
On the day today there will be some disruption as the US and Canada are out. But we still have plenty of data to get through. Here in Australia we get retail sales for July as well as more partials for Wednesday’s Q2 GDP release with business inventories and company profits out. It’s also Markit Manufacturing PMI day across the globe and that means we’ll also get the Caixin manufacturing PMI in China.
h2 Macro Stuff that affects everyone and everything – either today or eventually/h2 h2 International/h2
Have a great day's trading.
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