US MARKET WRAP – Record JOLTS Triggers USD Rebound, But Trump Weighs On Stocks Into The Close

The USD experienced broad based strength following a record JOLTS job openings release out of the US, with the greenback finishing higher against all of the majors ex-JPY & AUD. However, the big mover was the ZAR, which gave back its early gains on a combination of the broader USD strength and as South African President Zuma survived a no confidence vote.

US equities had recovered through the day after technology and consumer-focused sectors helped the indices negate early losses, with financials benefitting from the modest uptick in US yields. However, US President Trump pushed the major indices to session fresh lows not long before the close after he warned North Korea that a US to response to any threat would be “fire and fury the likes of which the world has never seen.” This meant that only the defensive utilities sector finished the session higher. The S&P 500 closed down 0.24% at 2,474.95, the NASDAQ closed down 0.14% at 5,926.35, and the Dow closed down 0.15% at 22,085.34.

Treasuries came under early pressure as BATS announced a bumper 8-part USD denominated batch of corporate supply, with some USD 17.25bln launched late on, with some modest pressure also seen post-JOLTS. The Treasury space experienced limited reprieve following an impressive 3y note auction out of the US, however, dealers deemed that the bounce presented a selling opportunity ahead of two-more legs of supply later this week - the more duration heavy 10s and 30s. Sep’17 10y T-note futures settled at 126.00+, down 5 ticks.

Oil was rangebound once again, with WTI settling at USD 49.17/bbl, down USD 0.22. The OPEC technical meeting generated no real headlines, while a meeting between the Saudi and Iraqi oil ministers did little to stoke markets. The main story was that Shell’s Pernis refinery will be fully operational on Friday, which weighed on markets early on, adding to negative sentiment after it became apparent that Chinese crude oil imports slipped to a seven-month low of 8.16mln bpd in July. Traders await the weekly API oil inventory release tonight, ahead of the official DoE report tomorrow.

08 Aug 2017 - 21:00- Fixed IncomeResearch Sheet- Source: RANsquawk