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Major pairs were off to a slow start on Monday as New York session traders kept close tabs on the path of Hurricane Harvey and projected its likely impact on the economy for the quarter.

  • U.S. goods trade deficit widened from $64B to $65.1B vs. $64.5B forecast
  • U.S. preliminary wholesale inventories increased 0.4% vs. 0.3% estimate
  • Canadian PM Trudeau: Trump’s threat to terminate NAFTA is nothing new

Major Events/Reports

Crude oil down nearly 3%

The lack of major economic releases kept market watchers closely glued to headlines on Hurricane Harvey and its storm path. The Tropical Storm is still hovering around the U.S. Gulf Coast, disrupting operations among oil refineries in the area.

According to the Bureau of Safety and Environmental Enforcement, approximately approximately 331,370 barrels of oil per day has been shut in, leading to an excess of Black Crack supplies for the week. The U.S. National Hurricane Center predicts that the storm will move over to Louisiana, which churns out around 3.3 million barrels per day, within the week.

  • WTI crude oil is down 2.38% to $46.73 per barrel
  • Brent crude oil is down 0.88% to $51.52 per barrel

Safe-haven demand has been in play, boosting gold 1.34% up to its highest level in more than a week.

U.S. stocks edge lower, drags USD

Investors have also been busy crunching the numbers on the potential economic damage caused by Hurricane Harvey this quarter, causing U.S. energy stocks to tumble and dragging most equity indices along with it.

  • The Dow 30 index is down 0.10% to 21,792.92
  • The S&P 500 index is down 0.02% to 2,442.52
  • The Nasdaq is up 0.25% to 6,281.07

Medium-tier reports from Uncle Sam turned out weaker than expected as the goods trade deficit widened from $64 billion to $65 billion, larger than the projected shortfall of $64.5 billion. Components of the report revealed that the wider deficit was mostly due to a 1.3% drop in exports, dragged down by an 8% slump in shipments of motor vehicles.

Preliminary wholesale inventories increased by 0.4% versus the projected 0.3% uptick to signal that businesses didn’t use as much stockpiles as expected in July. To top it off, the previous reading was revised from 0.6% to 0.7% to suggest weaker demand.

Major Market Mover(s):

USD

The Greenback was mostly lower against its peers as forex junkies worried that weak trade data and the impact of Hurricane Harvey would put a large dent on quarterly growth figures.

USD/JPY edged down to 109.17 (-0.17%), USD/CHF is down from a high of .9578 to .9552 (-0.10%), EUR/USD is up from 1.1945 to 1.1973 (+0.41%), and GBP/USD is up to 1.2929 (+0.39%)

CAD

The oil-related Loonie was also pushed lower, even after Canadian PM Trudeau sought to reassure markets that Trump’s NAFTA remarks are nothing new.

CAD/JPY is down from 87.62 to 87.33 (-0.31%), CAD/CHF tumbled to .7640 (-0.24%), EUR/CAD climbed from 1.4903 to 1.4968 (+0.59%), and GBP/CAD advanced to 1.6160 (+0.51%)

Watch Out For:

  • 12:30 am GMT: Japanese household spending y/y (0.8% expected, 2.3% previous)
  • 12:30 am GMT: Japanese unemployment rate (no change from 2.8% expected)
  • 6:30 am GMT: BOJ core CPI y/y (0.2% expected, 0.3% previous)