11 July: Late trade-war headline spooks markets. Trump in Brussels for NATO meeting. Politics to drive markets today.

By | July 11, 2018

 

Stocks traded higher again on Wednesday (DJ +0.6%, S+P + 0.4%) as a lull in the trade war gave traders room to focus on the start of the earnings season, with PepsiCo Inc. leading the way through the session, rising by more than 4% after reporting a better-than-forecast profit. Currencies saw an early US$ bid at the European open, but that dissipated and most pairs are back to where they were this time yesterday. Of particular note, a much weaker than expected German ZEW put some downside pressure on the Euro, while US$Jpy broke above 111.00.  Late in the day, as I write, a headline suggesting that the US is about to release a $200 bio China tariff list has knocked stocks lower, with safe haven buying also seeing a bid tone return to the Jpy, taking AudJpy in particular sharply lower. Stay nimble!

Elsewhere, US Treasury yields advanced for a second day in a row (US10Y; 2.867%), while WTI was rangebound either side of $74 a barrel.

Looking ahead, the calendar for Wednesday is pretty thin and for the most part it will be another session dominated by trade talks and politics. The main event of the day is going to be the Bank of Canada Interest Rate Decision, with a 25-point hike thought likely to occur.  Before then though, Asia will look to the Australian WBC Consumer Confidence (July) and the May Home loan data for May for guidance, while Japan will have the May Machinery Orders.  Europe is completely void of data while the US will see the June PPI (exp 0.1%mm, 3.2%yy, Ex F/EurUsd; 2.6%yy) and the May Wholesale Inventories (exp 0.2%mm). The Fed’s William will speak late in the day. Have a good one.

CURRENCIES
EURUSD: 1.1743
Res  1.1770  1.1790  1.1815
Sup  1.1725  1.1690  1.1670
USDJPY: 110.97
Res  111.15  111.35  111.60
Sup  110.85  110.65  110.50
GBPUSD: 1.3271
Res  1.3290  1.3315  1.3365
Sup  1.3225  1.3190  1.3155
USDCHF: 0.9921
Res  0.9930  0.9945  0.9960
Sup  0.9905  0.9885  0.9855
AUDUSD: 0.7440
Res  0.7455  0.7470  0.7485
Sup  0.7430  0.7415  0.7400
NZDUSD: 0.6832
Res  0.6860  0.6880  0.6920
Sup  0.6825  0.6805  0.6775
INDICES / COMMODITIES
S&P.fs: 2785.05
Res  2795.00  2805.00  2815.00
Sup  2780.00  2775.00  2765.00
DJ30.fs: 24759.00
Res  24850.00  24935.00  25015.00
Sup  24735.00  24670.00  24560.00
SPI200.fs: 6226
Res  6255  6270  6300
Sup  6215  6200  6180
XAUUSD: 1255.58
Res  1260.00  1265.00  1270.00
Sup  1250.00  1245.00  1240.00
XAGUSD: 16.06
Res  16.20  16.30  16.45
Sup  16.00  15.90  15.80
WTI.fs: 74.13
Res  74.45  74.80  75.35
Sup  73.65  72.95  72.10