By IFCMarkets
Dollar weakens despite positive data
US stock indices erased previous session gains Tuesday as technology and financial shares losses outweighed advances in energy and telecoms. The S&P 500 ended 0.5% lower at 2713.22. Dow Jones industrial average lost 0.5% to 24174.82. The Nasdaq composite index fell 0.9% to 7502.67. The dollar weakening 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, fell 0.3% to 94.57 and is lower currently. US markets are closed today for Independence Day holiday.
Trade war concerns were highlighted by late Monday news Trump administration cited “national security interests” as the reason for refusing China Mobile access to the US market. Positive economic data were shrugged off by market in thin trading ahead of holiday: US factory orders climbed 0.4% in May, in line with expectations, after upwardly revised 0.4% decline in April.
DAX leads major European indices recovery
European stock indices recovered Tuesday as the risk of German coalition government unraveling subsided with a migration deal between German Chancellor Merkel and her Interior Minister Horst Seehofer. Both the euro and British Pound’s turned higher against the dollar and are higher currently. The Stoxx Europe 600 gained 0.8%. The German DAX 30rose 0.9% to 12349.14. France’s CAC 40 gained 0.3% and UK’s FTSE 100 added 0.1% to 7554.37. Indices opened 0.2% – 0.4% lower today.
Merkel’s agreement with Seehofer averted a possible collapse of the coalition between her Christian Democrats (CDU) party, Seehofer’s Christian Social Union (CSU) and the Social Democrats (SPD). In economic news sales in the euro-zone in May were stagnant, while the UK purchasing managers’ index for construction in June rose more than expected to 53.1, a seven-month high.
Chinese shares lead Asian indices losses
Asian stock indices are falling. Nikkei lost 0.3% to 21717.04 as the yen continued to rise against the dollar. Chinese stocks are falling despite report China’s services activity expanded at the quickest rate in four months in June: the Shanghai Composite Index is down 1% and Hong Kong’s Hang Seng ndex is 1.3% lower. Australia’s All Ordinaries Index is down 0.4% despite a rise in retail sales and trade surplus in May with Australian dollar continuing the climb against the greenback.
Brent up
Brent futures prices are higher today on expectations of tighter US crude stocks. The American Petroleum Institute reported late Tuesday that US crude inventories fell by 4.5 million barrels. Prices ended higher yesterday: September Brent rose 0.6% to $77.76 a barrel Tuesday. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories.
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