Wall Street rallies on earnings

Strong earnings from the consumer sector gave US indices a lift yesterday, and those gains were maintained after FOMC minutes suggested the last rate cut was mid-cycle insurance against low inflation. The Kansas Fed’s Jackson Hole gathering kicks off today.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index recouped all of the previous day’s losses, and more, yesterday

• The index is testing the 100-day moving average at 26,293 this morning, which has capped prices on a closing basis since August 13

• The flash manufacturing PMI from Markit for August is expected to improve to 50.5 from 50.4 in July, the latest survey suggests. FOMC minutes showed a divided committee, with 2 members preferring a 50 bps cut instead of the 25 bps delivered.

DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 index jumped the most in four weeks yesterday following soothing words on Brexit solutions from Germany’s Merkel and UK’s Johnson

• The index touched the highest in eight days yesterday and is rising toward the 100-day moving average at 12,117

• Germany’s flash manufacturing PMI from Markit is seen deteriorating to 43.0 in August from 43.2 last month. That would be the 15th consecutive month in contraction territory.

WTICOUSD Daily Chart

Source: OANDA fxTrade

• Crude oil prices jumped to the highest in more than a week yesterday after EIA inventory data showed a larger-than-expected drawdown, before closing lower on the day

• West Texas Intermediate is currently sitting on the 200-day moving average at $56.03. The 55-day moving average is above the 200-day moving average this morning, the first time since August 1

• EIA crude oil stockpiles as at August 16 were published yesterday and showed a drawdown of 2.73 million barrels, more than the 1.89 million barrels analysts had expected.