US Net Capital Outflow Declined in September

News Event

From Trading Economics: Overseas investors sold $152.9 billion of US assets in September of 2016, including short-dated instruments after buying a downwardly revised $40 billion in August. Foreigners also sold $63.3 billion of long-term US securities, including government and corporate, after buying a downwardly revised $28.5 billion in the previous month. Foreign investors sold a record $76.6 billion of US Treasuries, after selling $24.8 billion in August. Capital Flows in the United States averaged 21281.

Market Snap

Market Closing Wrap

In European Equity Markets stocks fell on Wednesday, weighed down by a pull-back in banking stocks, while German chemical group Bayer fell after a costly bond issue. The STOXX 600 fell 0.2 percent. Europe's chemical index fell 1.2 percent, hit by a 4.2 percent fall in Bayer after the company placed 4 billion euros of bonds to help finance its Monsanto takeover. The Europe's bank indexfell 1.2 percent, making it the biggest sectoral loser in Europe, with Banca Popolare di Milano and other Italian lenders leading the selloff. Hugo Boss lost 10.2 percent after its new CEO said a plan to revive the struggling German fashion house by cutting brands and seeking to appeal to fashion-conscious younger customers will only bear fruit from 2018.

In Currency Markets the dollar climbed to a near 14-year high against a basket of currencies on Wednesday, even as analysts cautioned the greenback is vulnerable to a letdown from its rise tied to bets on pro-growth policies under U.S. President-elect Donald Trump. The dollar gained 0.3 percent to 109.48 yen after rising to 109.75 yen, its highest since June 1. Pressured by traders' conviction on a U.S. rate hike and political worries about Europe, the euro fell below $1.07 for the first time since the start of December 2015. The dollar index reached 100.57, up 0.2 percent on the day. It has risen 3.5 percent over eight days, which would be the biggest such increase since May 2015.

In Commodities Markets  oil prices were little changed in volatile trading as the market weighed Russia's comments about a possible meeting with Saudi Arabia that renewed hopes for a production freeze deal against a bigger-than-expected U.S. crude inventory build. Brent futures fell 2 cents to $46.93 a barrel. U.S. crude rose 0.2 percent, to $45.88 per barrel. The U.S. Energy Information Administration said crude stocks increased for a third straight week and rose by a bigger-than-expected 5.3 million barrels last week, topping analysts' 1.5 million-barrel.  Spot gold was down 0.1 percent at $1,226.85 an ounce. Silver was down 0.7 percent at $16.96 an ounce, and platinum was 0.2 percent lower at $933.24. Palladium  was up 1.2 percent at $714.25.

In US Equity Markets  the S&P and Dow were lower in late morning trading on Wednesday as financial stocks fell after a seven-day rally since Donald Trump's surprise election win, while a recovery in technology stocks boosted the Nasdaq. The Dow Jones Industrial Average fell 0.35 percent, at 18,857.18. The S&P 500 lost 0.24 percent, at 2,175.25 and the Nasdaq Composite rose 0.18 percent, at 5,285.32. Seven of the 11 major S&P 500 sectors were lower, with the financial index's fall of 1.48 percent leading the decliners. The S&P technology index rose 0.59 percent, helped by a rise in Apple, Microsoft and Alphabet. Target jumped 7.6 percent after the retailer reported a higher-than-expected quarterly profit and raised its full-year forecast.

 

In Bond Markets  the U.S. Treasury yield curve flattened on Wednesday with yields on shorter-dated maturities rising while yields on longer-dated ones fell as U.S. producer prices and industrial output data showed inflation could be growing more slowly than expected.  Benchmark 10-year Treasury notes were little changed in price to yield 2.244 percent. The 30-year bond rose 25/32 in price to yield 2.940 percent, moving further from its 2016 high of 3.067 percent touched on Monday. Conversely, 2-year Treasury notes fell 1/32 in price to yield 1.021 percent. Yields on the 2-year note earlier hit 1.03 percent, the highest since Jan. 4.

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