The main US stock indexes finished trading in the red, with the shares of the industrial sector and the base resources sector at the head of the decline due to Washington's threat to introduce additional tariffs on Chinese goods worth $ 200 billion, which caused fears about the escalating trade war.

A certain influence on the course of trading also provided data on the United States. The US Department of Labor said that the producer price index (PPI) rose 0.3 percent in June, helped by higher gasoline prices. PPI in May grew by 0.5 percent. For the 12 months to June PPI grew by 3.4 percent, which is the highest since November 2011. Producer prices in May rose by 3.1 percent compared to the previous year. Economists predicted that PPI will increase by 0.2 percent per month and by 3.2 percent year-on-year. Last month, the base producer price index, which excludes services in the areas of food, energy and trade, increased by 0.3 percent. The so-called basic PPI in May grew by 0.1 percent. For the 12 months to June, the base PPI increased by 2.7 percent after an increase of 2.6 percent in May.

A separate report showed that the growth rate of wholesale inventories in the US in May was slightly higher than the initial estimate and forecasts, which was due to a significant increase in the stock of machinery and a number of other goods. The Ministry of Trade reported that wholesale stocks increased by 0.6% instead of the 0.5% increase reported in June. Recall, in April, inventories rose by 0.1%. In annual terms, reserves in May increased by 5.9%.

Oil futures have significantly fallen in price, the reasons for which were the pervasive strengthening of the US dollar and the expectation of an increase in supplies from Libya and Iran.

Most of the components of DOW finished trading in the red (24 out of 30). Outsider were shares of Chevron Corporation (CVX, -3.19%). The leader of growth was the shares of The Walt Disney Company (DIS, + 1.90%).

Almost all S & P sectors recorded a decline. The largest decrease was in the base resources sector (-2.6%). Only the utilities sector grew (+ 0.3%).

At closing:

Dow 24,700.45 -219.21 -0.88%

S&P 500 2,774.02 -19.82 -0.71%

Nasdaq 100 7,716.61 -42.59 -0.55%

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 12.6 million barrels from the previous week. At 405.2 million barrels, U.S. crude oil inventories are about 4% below the five year average for this time of year.

Total motor gasoline inventories decreased by 0.7 million barrels last week and are about 6% above the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased by 4.1 million barrels last week and are about 12% below the five year average for this time of year. Propane/propylene inventories increased by 2.4 million barrels last week and are about 10% below the five year average for this time of year. Total commercial petroleum inventories decreased by 7.2 million barrels last week.

Total inventories of merchant wholesalers, except manufacturers' sales branches and offices, after adjustment for seasonal variations but not for price changes, were $633.5 billion at the end of May, up 0.6 percent (±0.2 percent) from the revised April level. Total inventories were up 5.9 percent (±3.7 percent) from the revised May 2017 level. The April 2018 to May 2018 percent change was revised from the advance estimate of up 0.5 percent (±0.2 percent) to up 0.6 percent (±0.2 percent).

The May inventories/sales ratio for merchant wholesalers, except manufacturers' sales branches and offices, based on seasonally adjusted data, was 1.24. The May 2017 ratio was 1.31.

"The Bank of Canada today increased its target for the overnight rate to 1 ½ per cent. The Bank Rate is correspondingly 1 ¾ per cent and the deposit rate is 1 ¼ per cent.

The Bank expects the global economy to grow by about 3 ¾ per cent in 2018 and 3 ½ per cent in 2019, in line with the April Monetary Policy Report (MPR). The US economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the US dollar. This is contributing to financial stresses in some emerging market economies. Meanwhile, oil prices have risen. Yet, the Canadian dollar is lower, reflecting broad-based US dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects.

Canada's economy continues to operate close to its capacity and the composition of growth is shifting. Temporary factors are causing volatility in quarterly growth rates: the Bank projects a pick-up to 2.8 per cent in the second quarter and a moderation to 1.5 per cent in the third. Household spending is being dampened by higher interest rates and tighter mortgage lending guidelines. Recent data suggest housing markets are beginning to stabilize following a weak start to 2018. Meanwhile, exports are being buoyed by strong global demand and higher commodity prices. Business investment is growing in response to solid demand growth and capacity pressures, although trade tensions are weighing on investment in some sectors. Overall, the Bank still expects average growth of close to 2 per cent over 2018-2020.

CPI and the Bank's core measures of inflation remain near 2 per cent, consistent with an economy operating close to capacity. CPI inflation is expected to edge up further to about 2.5 per cent before settling back to 2 per cent by the second half of 2019. The Bank estimates that underlying wage growth is running at about 2.3 per cent, slower than would be expected in a labour market with no slack".

U.S. stock-index futures rose slightly on Tuesday, as concerns over global trade friction reignited after the U.S. released a list of $200 billion worth of Chinese goods it might hit with tariff increases.

Global Stocks:

Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)

The Producer Price Index for final demand rose 0.3 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.5 percent in May and 0.1 percent in April. On an unadjusted basis, the final demand index moved up 3.4 percent for the 12 months ended in June, the largest 12-month increase since climbing 3.7 percent in November 2011.

In June, most of the rise in the index for final demand is attributable to a 0.4-percent advance in prices for final demand services. The index for final demand goods edged up 0.1 percent.

Prices for final demand less foods, energy, and trade services moved up 0.3 percent in June after rising 0.1 percent in May. For the 12 months ended in June, the index for final demand less foods, energy, and trade services climbed 2.7 percent.

Analyst coverage initiations before the market open

Twitter (TWTR) initiated with Reduce at Nomura Instinet; target $31
Facebook (FB) initiated with Buy at Nomura Instanet
Google (GOOGL) initiated with Buy at Nomura Instanet
Walt Disney (DIS) initiated with Neutral at Credit Suisse
T&T (T) initiated with Underperform at Credit Suisse
Verizon (VZ) initiated with Outperform at Credit Suisse

• Some saying an increase is possible as early as July 2019 and others ruling out a move until autumn, according to several sources - Reuters.

• Tell OPEC They Boosted Output by 459,000 B/D in June

• Oil Demand Growth to Slow Down, Rise by 1.45M B/D in 2019

• Non-OPEC Oil Supply to Expand by 2.1M B/D Next Year

• Citing Weak Inflation, Dissented Against Raising Interest in December; Now Says Outlook for Sustained Inflation at 2% 'Looks Quite Good'

• Earlier Wednesday Trump Accused Germany of Being 'Captive to Russia'

The Bank of Canada's view on the economic outlook will be more important for the Canadian dollar than the expected interest rate increase on Wednesday, which is already nearly fully priced in, says Commerzbank. What matters is "how optimistic the central bank will sound as regards the economic and inflation outlook and how quickly further rate hikes will follow as a result." This will depend partly on future U.S.-Canada trade negotiations and the future NAFTA deal. Commerzbank expects investors "to exercise restraint regarding the Canadian currency in view of the continued uncertainty about NAFTA - at least for the time being." USD/CAD up 0.3% at 1.3150. The BOC decision is due at 1400 GMT. It is expected to raise its key interest rates by 25 basis points to 1.50% - via Wall Street Journal

• 'The United States is Paying Far Too Much'

• Criticizes Germany for Striking Gas Deal With Russia

EUR/USD

Resistance levels (open interest**, contracts)

$1.1879 (2090)

$1.1842 (2591)

$1.1816 (155)

Price at time of writing this review: $1.1738

Support levels (open interest**, contracts):

$1.1696 (1797)

$1.1662 (3318)

$1.1624 (3136)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 13 is 80726 contracts (according to data from July, 10) with the maximum number of contracts with strike price $1,1600 (4272);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3411 (830)

$1.3371 (661)

$1.3345 (669)

Price at time of writing this review: $1.3270

Support levels (open interest**, contracts):

$1.3194 (1465)

$1.3165 (1396)

$1.3133 (1964)

Comments:

- Overall open interest on the CALL options with the expiration date August, 13 is 21639 contracts, with the maximum number of contracts with strike price $1,3600 (3184);

- Overall open interest on the PUT options with the expiration date August, 13 is 25137 contracts, with the maximum number of contracts with strike price $1,3100 (2570);

- The ratio of PUT/CALL was 1.16 versus 1.14 from the previous trading day according to data from July, 10.

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

. August light, sweet crude on the New York Mercantile Exchange was recently down 0.6% at $73.64 a barrel in the Globex trading session. September Brent fell 0.9% to $78.18. Declines were more than 1% for both benchmarks in morning trade. - via WSJ

Japan's tertiary activity index increased for the second straight month in May, though marginally, according to rttnews.

The tertiary activity index edged up 0.1 percent month-over-month in May, following a 1.0 percent rise in April. In contrast, economists had expected a 0.3 percent decrease for the month.

Among the individual components of the survey, activity was up for wholesale trade, medical, health care and welfare, information and communications, transport and postal activities, finance and insurance and business-related services.

The trend estimate for the total value of dwelling finance commitments excluding alterations and additions fell 0.7%. Owner occupied housing commitments fell 0.2% and investment housing commitments fell 1.9%.

In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 0.5%.

May 2018 compared with April 2018:

• In trend terms, the number of commitments for owner occupied housing finance fell 0.7% in May 2018.

• In trend terms, the number of commitments for the construction of dwellings fell 1.5%, the number of commitments for the purchase of new dwellings fell 0.9% and the number of commitments for the purchase of established dwellings fell 0.6%.

• In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments was unchanged at 17.6% in May 2018.

• China Is Shocked By US Action, The US List Is Unacceptable