This short week has been short on major economic news. Stock market has been drifting higher.
If anything the biggest news has been possible Chinese investigation into speculative trading in commodities. Spreading rumors and fears are affecting many commodities, particularly industrial metals, in a negative way.
Today saw a pretty steep selloff in US treasuries perhaps triggered by lukewarm bond auction results, Bund held in better.
After a blistering start last week for risk assets this week has been decisively more quiet on slow flow of economic data.
U.S. trade gap narrows more than expected in July
• The U.S. trade deficit narrowed more than expected in July, as imports retreated and exports shot to their highest since August 2008
• Exports rose to 1.8 percent to $153.3 billion, led by strong overseas demand for U.S. civilian aircraft, machinery, computers and other capital goods.
• Imports fell 2.1 percent to $196.1 billion, after a 3percent rise in June that had caught many analysts by surprise and lowered estimates of second-quarter U.S. growth.
• This is probably good news for USD – but no big news for stocks, commodities and bonds. However, growth in export is likely to be a positive contributor for Q3 GDP which can be good for risk assets.
US initial jobless claims falls slightly
• Initial jobless claims dropped by 27,000 to 451,000 in the week ended Sept. 4, the lowest level in almost two months.
US petroleum inventory rises to the highest level since 1990
• Petroleum stockpiles, including oil and fuels, rose 196,000 barrels to 1.14 billion last week, according to the Energy Department.
Possible Chinese Commodity Trading probe affecting markets
• Base metals are slipping on talk of Chinese crackdown on illegal funds, led by liquidation in Shanghai zinc where open interest dropped by 50,000 lots or almost 10 percent, traders said.
• "Zinc open interest is down 50,000 lots. It looks like someone was dumping zinc, taking profits and met no buyers and it spread to the rest of the market," a trader in Shanghai said.
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