S&P 500 closes above 2000 for first time ever…


– The dollar index trade near to 13-month peak early on Wednesday, with the euro still under pressure amid expectations of further policy easing from the ECB.

– S&P 500 closes above 2000 for the first time ever on Tuesday. Japan’s Nikkei 0.09\%, Hong Kong’s Hang Seng -0.42\% (07:13 GMT), Korea’s Kospi 0.33\%, Australia’s ASX 200 0.25\% and China’s Shanghai 0.11\%.

– The dollar index rose as far as 82.698 after finally breaking above its Sept. 5, 2013 peak of 82.671.

– The euro fell to as low as $1.31525, its lowest in almost a year, bringing into play the Sept. 6 2013 trough at $1.31 level.

– The euro also touched its lowest level in nearly 10 months versus the Australian dollar at A$1.4106. Against the Canadian dollar, the euro set a nine-month low of C$1.4359.

– All eyes now are on the next weeks ECB’s policy meeting on Sept. 4, as Draghi having rekindled prospects of more monetary stimulus,

– U.S. manufactured durable goods posted their biggest gain on record in July, while consumer confidence rose in August to its highest level since October 2007, data showed yesterday.

– Palestinian officials said on Tuesday a Gaza ceasefire deal with Israel has been reached under Egyptian mediation and a formal announcement of an agreement was imminent.

– US Treasuries were the cheapest versus their international counterparts in seven years as a gauge of economic data showed figures are beating analysts’ forecasts by the most since February. The U.S. is scheduled to sell $35 billion of five-year notes and $13 billion of two-year floating-rate debt today, followed by $29 billion of seven-year securities tomorrow. A two-year auction yesterday drew close to the highest yield in three years after Federal Reserve Chair Janet Yellen said last week the central bank may raise interest rates from zero sooner than policy makers estimate if labor markets keep improving.

– German consumers have become less optimistic this August. The consumer climate suffered a setback. Following a revised value of 8.9 points in August, the overall indicator is forecasting 8.6 points for September. When compared with the previous month, both income expectations and willingness to buy have fallen slightly, while economic expectations completely collapsed in light of the intensified state of international affairs.

– JP Morgan on EUR/USD: In a recent note to clients, JP Morgan reiterates its baseline views, forecasts, and strategies for the US dollar amid its ongoing rally across the board. We keep the 1.30 EUR/USD target. Similarly with sterling, the currency is underperforming on a short-term softening in activity and inflation data but there is no change to our call for a Q1 2015 hike. So the forecast is unchanged but the near-term trading strategy is short the currency going into the wildcard of the Scottish referendum,” JPM projects.

– The Swiss UBS consumption indicator clearly buckled in July after reaching its six-year high in the previous month. The UBS consumption indicator sank from 2.07 to 1.66 points in July. The decrease is based on the development of most of the sub-indicators. Only new vehicle registrations rose in July, preventing an even stronger drop in the UBS consumption indicator.

– The New Zealand dollar to $0.8380, edging away from a six-month low of $0.8311 hit yesterday. The kiwi found some support after giant cooperative Fonterra reaffirmed its forecast for its farm gate milk price for the 2014/15 season. It also said it expected global milk prices to improve later in the year after falling nearly 70 percent since the start of 2014.

Tsaprounis Vasilis

Chief Economist & Institutional Relations

Zulu Trade

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