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.
|INDICES / COMMODITIES|