GBP Day's Biggest Performer After Strong UK Services PMI Data
Ashraf Laidi | Jul 04, 2018 06:32AM ET
As England celebrated shaking off the World Cup penalties curse on Tuesday evening, US microchip giant Micron Technology Inc (NASDAQ:MU) was hit with a different kind of penalty after being temporarily banned from China in a fresh front in the trade war. The Australian dollar was the top performer as China's currency posted its biggest gain vs USD in over months. GBP is the day's biggest performer after UK services PMI rise to its highest since October 2017. US markets are closed on Wednesday for Independence Day Holiday but activity should resume fast and heavy on Thursday for US services ISM, Fed minutes, ADP and jobless claims, followed by the US and Canada jobs report on Friday.
Micron has been a stock market darling for the past year and does half its sales in China but more importantly, the market took it as a signal of fresh barriers in the trade dispute. US equities had been comfortably higher then slumped in the final hour of trade on the headlines.
Earlier in the day, markets were cheering a reversal in yuan weakness and comments from the PBOC that the currency won't be used in any trade dispute. That had led to a broad slide in the US dollar, especially in USD/JPY as it fell to 110.50 from 111.10.
Oil made some dramatic moves as WTI jumped up to a fresh three-year high at $75.27 then almost immediately plunged, falling all the way to $72.73. There were no headlines to justify the move and it might just have been a case of flows ahead of the US holiday. WTI eventually crawled back up to $74.28 to finish higher on the day again. The Canadian dollar was dragged along for the ride before finishing at 1.3143.
Economic news was rosy for the US as factory orders rose 0.4% compared to 0.0% expected. Positive revisions and upbeat secondary metrics underscored the beat. One concern is that inventory-building is pushing up production because of fears of tariffs and, if so, that could skew growth and central bank thinking in the months ahead. However a sign of upbeat consumers also came from US auto sales at a rate of 17.38m compared to 17.00m expected.
Happy 4th of July to our US readers.
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