Overnight saw the Dollar Index trade up from 98.9 to 99.59, the index is up around 0.8% since Tuesday morning, bouncing off a 4-month low. The strongest Consumer Confidence, 125.6, in 17 years out of the US overnight smashed expectations, this drove the Dow (+0.73%) and S&P500 (+0.73%) up, reversing all the Trump Health Care bill sell off.
The market likely now focusses on Trumps Tax plans. Promises of a 30% tax cut during his campaign are rumoured to be around the 15% mark – even so, the US equity market seems happy to recover some it’s March losses.
A stronger US dollar index pressured the Euro and Pound. The Euro closed Monday mornings Asian session gap open convincingly, trading as low as 1.07989 during the session. The pound also came under pressure part way into the European session, gaining losses during the US session.
UK Prime Minister May has signed Article 50 and will now send to the European Union. The day after Article 50 is triggered, Brexit secretary David Davis is set to publish the UK government “great repeal bill” that establishes an end to the authority of EU law. With the UK set to leave the EU by March 29, 2019, it is understood that negotiations will be around legal and trading relations with the bloc.
FOMCs Fischer said two more rate hikes this year “seems about right”. His view on Trumps failed health-care bill has not changed his overall outlook of waiting and watching the negotiations between Congress and the White House.
Analysts at UBS have forecast that the final round of French election voting on May 7, should go the way of Emmanuel Macron. Despite opinion polls, they note anti-immigration and EU advocate Marine Le Pen would have 40% of the vote when they go head-to-head. As the election draws near recent strong performance in the Euro could see some reversals.
Bank of Canada Governor Poloz stated overnight the country has yet to recover from the oil price shock, and is confident Canada has more room to grow. Regarding rates, he said lifting would tip Canada into a recession. Economists largely expect the bank will not raise rates until 2018. Even with stronger jobs growth, GDP and retail sales the Governor remains dovish.
The ASX200 has been the outperformer this week, with traders eyeing the 6,000 level. Strong bank performance and dividend payouts adding to the strength.
Today’s calendar (AEST)
10:50am Japanese Retail Sales
5:00pm German Import Prices m/m
In the US Session
12:20am FOMC Member Evans Speaks
1:00am Pending Home Sales m/m
1:30am Crude Oil Inventories
