Summary:
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Indices dip on China trade news; Trump responds
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US core inflation metric falls
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S&P500 still near record highs
There was a flurry of activity in US indices this morning after some negative remarks from Beijing caused a swift drop in the markets (read more here). However, this drop has since been pared somewhat and a conciliatory tweet from Donald Trump in recent minutes could also be seen to further ease any flare up in tensions.
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Trump took to social media to respond to the latest developments on the trade front with an upbeat message. Source: Twitter
Stuck between yesterday’s GDP and ADP releases and tomorrow’s NFP and ISM, today is relatively quiet on the data front. However, it is worth noting the latest inflation reading which is seen as the preferred measure by the Fed has shown a little drop. The core PCE price index Y/Y came in at +1.7% as expected, down from +1.8% last month. In M/M terms there was a flat reading of 0.0% against a forecast +0.1%. The headline reading Y/Y was +1.3% vs +1.4% expected. Down from +1.4% last month.
US inflation as measured by the PCE dipped lower in the past month and is now comfortably below the 2% target. Source: XTB Macrobond
The US500 has pulled back to the 21 EMA on H4 in recent trade after making a new all-time high yesterday at 3055. A break below 3023 is needed before bears can get excited that this is anything other than a dip in the prevailing uptrend. Source: xStation
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