Trumps Speech at 1pm Sydney is the highlight of the week.
The keywords to be focus on are Stimulus talk, China and Border and Corporate Taxes.
By all Accounts it is likely to be short on details especially when it comes to new Tax cuts as Trump has previously suggest obamacare needs to be repealed/replaced before he can move on to taxes.
Details about his massive fiscal stimulus plans in terms of Infrastructure and Defense spending will likely have impact on stocks the most today and expectations are very high given the historic rally into this speech.
If the market does not react to his lack of detail and disappoint doesn’t immediately set in then we should see the market focus quickly back on the FED rate hike talk and this should be very supportive of USD strength short term.
- Fed’s Dudley: Case for rate rise is more compelling
- More from Fed’s Williams: Right now interest rates are abnormally low
- Fed’s Williams: Rate increase up for ‘serious consideration’ in March
- Fed’s Harker: Repeats that 3 hikes appropriate this year
US Stocks stalled with markets failing to break a record 13th day of gains and we have closed -0.1% on the Dow.
The USD however has surged higher into the close with a strew of FED official all talking up the chances of a March Rate hike. The market is now pricing in a 70% chance up from 50% earlier in the day and 33% at the start of the week.
USD/JPY reacted the most with the pair under pressure before the comments and tested the cycle lows at Y111.60 before rebounding with the FED comments to Y112.80.
AUD/USD rolled over from 0.7700 and is under pressure pulling back to 0.7660. The AUD/USD has had repeated failures at 0.7700 now and if the USD strength continues post trump we could see stops under 0.7600 threatened.
|
|
(=)
(=)
