US stocks hit new highs; GBPUSD dips to $1.30

Summary:

• Wall St still outperforming European peers

• GBP dips as BoE stand pat

• Coffee pulls back 

• What does PhaseOne deal mean for Soybeans and Corn

A couple of data points from the US came in worse than expected ahead of the Wall Street open with the most recent look at manufacturing and the labour market both disappointing. The Philly Fed manufacturing index dropped to 0.3 from 10.4 previously, lower than the 8.1 expected. At the same time the weekly initial jobless claims came in at 234k vs a consensus forecast of 225k, down from 252k prior.  

There’s been some clear weakness in European markets in recent trade but for now the US seems to be looking through this and holding up pretty well. The DE30 has declined by around 250 points in recent trade but the US500 continues to trade close to its highest ever level and just above 3200.

 As was almost unanimously expected the Bank of England have decided to keep the base rate unchanged at 0.75% for the 17th consecutive month. Ratesetters voted 7-2 in favour of no change in rates with Haskel and Saunders once more the two dissenters. As far as the extent to which political uncertainty has been alleviated the Bank said that there is no evidence yet to support this and overall their statement is fairly neutral. The initial reaction saw the pound move higher with the GBP/USD but it has since fallen to a low just beneath $1.30  to hit its lowest level in a fortnight. 

In the commodity space there’s been some significant selling in Coffee with the market tumbling and threatening to end its recent strong run higher. Price has dropped as much as 3% to trade at 127 once more.

Staying with commodities for our latest market alert we focus on Soybeans and Corn, looking at the potential impact the Phase One trade deal between the US and China will have on these markets. The article can be read in full here.