Morning Minutes

US Dollar Climbs While Banks and Retailers Struggle




Trading across world markets has been mixed overnight and this morning with investors apparently indecisive over whether to expect a hawkish or dovish Fed when Chair Powell speaks at the Jackson Hole conference on Friday. Yesterday’s flash PMI and new home sales numbers were very disappointing and hinted a recession may be underway but today’s US durable goods orders for July has been seen as slightly encouraging. While the headline number was disappointing relative to expectations (0% vs street 0.6%), orders excluding defense were significantly better than expected (1.2% vs street 0.0%). US pending home sales are due at 10:00 am EDT today followed by weekly US natural gas inventories at 10:30 am.

US index futures are steady so far today trading flat to up 0.2%. In Europe, the Dax is flat while the FTSE is down 0.2%. The US 10-year treasury note yield is creeping upward this morning toward 3.10% which appears to be providing a boost to the US Dollar which is up 0.4% against the Loonie and Bitcoin, 0.5% against the Euro and 0.6% against the Pound. Commodity action is mixed today. Energy contracts are climbing with WTI crude oil up 0.5% and natural gas up 1.3% as it claws back yesterday’s late day slide. Metals are falling, however, with copper down 1.5% and platinum down 1.3%.

Today’s Canadian bank earnings are mixed with Royal Bank ($2.55 vs street $2.67) reporting disappointing numbers well below expectations and National Bank ($2.35 vs street $2.34) beating the street by a penny. Increasing loan loss provisions, an uncertain economic environment and outlook and a big dropoff in capital markets business reported by RBC echoed Bank of Nova Scotia’s results from yesterday and suggest a common theme may be emerging. CIBC and TD Bank report results tomorrow. In the US, retailer Nordstrom is down 12.9% in premarket trading after the retailer cut its earnings forecast for this year to $4.00-$4.20 from $4.55-$4.95.   

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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