Dollar turns higher on PCE uptick
US stock market pulled back Thursday on reports President Donald Trump intends to order tariffs against $200 billion worth of Chinese products. The S&P 500 lost 0.4% to 2901.13. Dow Jones industrial average fell 0.5% to 25656.98. The Nasdaq composite slid 0.3% to 8088.36. The dollar strengthening resumed: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 94.667 but is lower currently. Stock index futures point to lower openings today.
Lingering trade war concerns weighed on market sentiment against the background of continuing financial turmoil in Argentina and Turkey. Economic data were mostly positive: initial jobless claims rose less than expected, with the monthly average hitting the lowest level since December 1969. Personal spending rose 0.4% in July from 0.3% in June while personal income grew at 0.3% when a steady 0.4% growth was expected. And the personal consumption expenditure index, the Federal Reserve’s preferred inflation gauge, rose to 2.3% from 2.2%, the highest level since April 2012, suggesting the Fed is likely to stick to its rate hikes plan.
Main European indices open lower
European stocks retreated on Thursday on mixed economic data. Both the EUR/USD and GBP/USD turned lower with both pairs higher currently. The Stoxx Europe 600 index lost 0.3%. Germany’s DAX 30 fell 0.5% to 12494.24. France’s CAC 40 ended 0.4% lower and UK’s FTSE 100 dropped 0.6% to 7516.03. Markets opened 0.2% - 0.6% lower today.
Investors will be watching closely a meeting today between Michel Barnier, European Union’s top Brexit negotiator and UK Brexit Secretary Dominic Raab. In economic news German jobless claims fell in August while its unemployment rate remained at 5.2%, as had been expected. UK car manufacturing fell 11% in July.
Asian indices fall
Asian stock indices are lower today with trade tensions still in focus as US companies have until September 6 to comment on duties for $200 billion worth Chinese imports proposed by President Trump. Nikkei ended 0.02% lower at 22865.15 as yen climb against the dollar continued. Chinese stocks are lower despite a rebound in China's manufacturing and services indexes in August: the Shanghai Composite Index is 0.5% lower while Hong Kong’s Hang Seng Index is down 1.3%. Australia’s All Ordinaries Index extended losses 0.5% while Australian dollar slide against the greenback slowed.
Brent advance continues
Brent futures prices are advancing today on expected Iran sanctions and falling Venezuelan output. Prices ended higher yesterday: Brent for October settlement closed 0.8% higher at $77.77 a barrel on Thursday.