Wall Street is wobbling on the first trading day of September although the three main indices are well above their August lows. Nike shares (NKE: NYSE) dipped because some investors fear negative fall-out after Nike injected itself into the NFL anthem controversy. Facebook (FE: NASDAQ) shed 3.4% as of 13:45 GMT an analyst downgraded the company to neutral from buy, blaming a deceleration in growth and regulatory scrutiny for the decision.
WTI oil prices surged to $71.377barrel overnight due to news that Gulf of Mexico rigs were evacuated because of soon-to-be Hurricane George. However, a report that Saudi Arabia increased oil production in August has driven prices to $70.53/b in New York.
A better-than-expected US ISM Manufacturing PMI data for August (Actual 61.3 versus forecast 57.7) underpinned an already firming US dollar. GBPUSD is virtually unchanged from its opening level. It was the biggest losing G-10 currency between the New York close on Friday and this morning’s open, so perhaps GBPUSD sellers just needed a break.
Bank of England governor Mark Carney’s testimony before the House of Commons saw him try to walk back his comments from last month where he said that the UK’s biggest risk was from a “no-deal” Brexit. He said he believed that it was unlikely to happen.
USDCAD soared, and it is trading at the overnight and session peak of 1.32065 as of 1400 GMT after the Nafta talks deadline passed without a deal, on Friday.
President Trump tweeted on Saturday: “There is no political necessity to keep Canada in the new NAFTA deal. If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out. Congress should not interfere w/ these negotiations, or I will simply terminate NAFTA entirely & we will be far better off...”
He continued with “....Remember, NAFTA was one of the WORST Trade Deals ever made. The U.S. lost thousands of businesses and millions of jobs. We were far better off before NAFTA - should never have been signed. Even the Vat Tax was not accounted for. We make new deal or go back to pre-NAFTA!”
The Bank of Canada policy meeting is tomorrow. Last week’s mildly softer-than-expected GDP report and the lack of a US/Canada trade deal will ensure that rates don’t rise tomorrow.