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The dollar managed to get a reprieve from its slide thanks to strong consumer confidence data and higher US bond yields. Other medium-tier reports, however, actually printed weaker than expected results.

  • U.S. goods trade deficit widened from $67.9B to $72.2B vs $68.6B forecast
  • U.S. preliminary wholesale inventories up 0.7% vs. 0.1% consensus
  • S&P/CS house price index down from 6.5% to 6.3% vs. 6.4% forecast
  • CB consumer confidence index up from 127.9 to 133.4 in Aug
  • Richmond manufacturing index up from 20 to 24 vs. estimate at 18
  • API: Crude oil stockpiles up 38K barrels vs. estimated 0.5M drop
  • Germany to provide a financial lifeline to Turkey?

Major Events/Reports:

Consumer confidence hits record high

It turns out Americans are in a very cheery mood this month as the CB consumer confidence index surged to its highest level since October 2000.

The index advanced from an upgraded 127.9 figure in July to 133.4 in August instead of dipping to the projected 126.6 reading. Components of the report revealed that consumers’ assessment of business and labor conditions improved further.

Even better, the percentage of consumers expecting business conditions will get better over the next six months ticked up from 22.9% to 24.3% during the month.

Now this is a pretty big deal since stronger consumer confidence is seen as a leading indicator of higher spending, as folks are more likely to go on shopping sprees instead of keeping their hands in their pockets.

Stocks up, commodities down

Most higher-yielders still managed to squeeze out a few gains during the session on positive trade developments, but the gains were feeble.

  • Dow 30 index is up 14.38 points to 26,064.02 (+0.06%)
  • S&P 500 index is up 0.78 points to 2,897.57 (+0.03%)
  • Nasdaq is up 12.14 points to 8,030.04 (+0.14%)

Gold returned some of its earlier gains while crude oil took more hits, likely on additional downside pressure from API data.

  • The precious metal fell to $1,200.59 per troy ounce (-0.91%)
  • WTI crude oil slipped to $60.52 per barrel (-0.51%)

Private crude oil inventories ticked up 38K barrels in the previous week versus estimates of a 0.5 million draw.

Major Market Mover(s):

USD

The dollar caught a few bids during the session thanks to a surge in consumer confidence and upticks in U.S. bond yields.

USD/JPY bounced from 111.09 to 111.25; USD/CHF found support around .9750 and pulled up slightly to .9778; EUR/USD retreated to the 1.1700 mark, and GBP/USD is down to 1.2867.

CHF

The Swiss franc was able to hold on to its lead from earlier in the day and even squeezed out a few gains before the New York session closing bell tolled.

NZD/CHF slid from .6548 to a low of .6541; EUR/CHF dropped from 1.1434 to 1.1418; GBP/CHF tumbled to 1.2567, and CHF/JPY advanced from 113.74 to 113.83.

EUR

On the flip side, the euro took some hits, possibly due to the rebound in the dollar and also on reports that Germany is looking to throw a financial lifeline to Turkey. This appears to have revived speculations that the threat of contagion in Europe is getting real.

EUR/JPY retreated from a session high of 130.26 to 129.97; EUR/AUD is down to 1.5921; EUR/CAD also fell to 1.5117; EUR/NZD dipped to 1.7416, but EUR/GBP is still up at the .9100 mark.

Watch Out For:

  • Tentative: Australia’s HIA new home sales (2.2% previous)
  • 5:00 am GMT: Japanese consumer confidence index (dip from 43.5 to 43.4 eyed)