The trade deficit narrowed, easing fears of further 3Q22 US GDP contraction. Nasdaq led Wall Street’s gains, with gains of more than 200 points, stopping a seven-day decline. In addition to Microsoft and Google, Nasdaq’s uptick was supported by Apple shares which rose 1%, following the launch of a number of new products including the iPhone 14. US Trade Balance Jul. recorded a deficit of -USD70.6B (Vs. Jun. -USD80.9B) or a 13% MoM lower deficit. Previously, Trade Balance added 1.42% points to 2Q22 US GDP which experienced a Technical Recession -0.6% QoQ (Vs. 1Q22 -1.6% QoQ). Wall Street’s appreciation also occurred in line with the strengthening of Risk Free UST10Y, which recorded a decrease in yield of 9Bps to a level of 3.27%, from yield of 3.35% or the highest level since June 2022.

In addition to the ECB’s monetary policy, investors are also looking forward to the US jobless claims data and Powell’s speech. JCI closed down 46 points, after two consecutive days of closing above the psychological level of 7,200. The movement of the JCI was in response to Wall Street’s re-emergence of pressure, and the weakening of European markets in early trading. Based on a Bloomberg survey, the ECB Main Refinancing Rate Sept. is projected to rise +75Bps to 1.25% (Vs. Aug. 0.50%), with US Initial Jobless Claims ending September 3 projected to be maintained at 235K claims. Fed Chair Powell is scheduled to take part in a panel discussion at the Cato Institute virtual meeting. NHKSI Research projects that JCI will move to test support, with Support: 7.166-7.150 / 7.080- 7.040 and Resistance: 7,200 / 7,250 / 7,288.

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