Wall Street opened higher, with futures currently indicating a about a 0.3% gain for the major indices. The pandemic-low print for jobless claims helped sentiment, though overall, investors are likely to keep their powder dry ahead of Friday’s August employment report. September has historically been the weakest month of the year, though much will depend on how expectations for Fed QE tapering play out. The outcome of Friday’s jobs report could go some way in determining those expectations.
The US Dollar ticked slightly higher following the mix of data, which saw the trade deficit narrow more than consensus, and initial and continuing jobless claims fall to pandemic lows. Q2 productivity was revised slightly lower, while unit labor costs were revised higher. USDJPY touched 110.05 highs from 110.00, and EURUSD dipped to 1.1837 from 1.1845. Equity futures continue to indicate a moderately higher Wall Street open, while yields are little changed.
US trade deficit narrowed -4.3% to -$70.1 bln in July after widening 6.8% to -$73.2 bln (was -$75.7 bln) in June which is the all-time wide. Exports jumped 1.3% to $212.8 bln after edging up 0.6% in June and 0.9% in May. July Imports declined -0.2% to $282.9 bln following the 2.2% (was 2.1%) June jump and the 1.4% (was 1.3%) May climb. The “real” goods trade balance shrank to -$100.1 bln from -$105.0 bln (was -$105.2 bln), with exports rising 1.0% from the prior -0.7% and imports dropping -1.4% from the prior 0.9% (was 1.0%) gain.
US initial jobless claims fell -14k to 340k in the week ended August 28, another new post-covid low, after the 5k bounce to 354k (was 353k) previously. The 4-week moving average dropped to 355k from 366.75k (was 366.5k). Claims not seasonally adjusted declined -11k to 287.8k after sliding -10.7k to 298.8k (was 297.8k). Continuing claims tumbled -160k to 2,748k for the August 21 week, also a new post-covid nadir, after the prior 43k increase to 2,908k (was 2,862k).
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Andria Pichidi
Market Analyst
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