A big week ahead in markets. President Trump will address a joint session of Congress on Tuesday evening (early Wednesday Asian session) to announce his phenomenal tax plan, five FOMC members will speak throughout the week, and Fed Chair Janet Yellen addresses the US Economic Outlook on Saturday morning.
Trumps tax plan will need to be detailed, if not set out a clear roadmap, live up to the ‘phenomenal’ moniker and be achievable by August if equity indices are to rally. Keep in mind Trumps plan for a weaker US Dollar, which may feature in his comments once again and slow down any US Dollar index rally.
US Equity Indices recovered losses during Fridays session to finish in the green….again. The Dow posting its longest winning streak in 25 years. Gold showed strength on the European open, trading a low of 1,251.1 before settling in the US session at 1,257.60. The precious metal is trading 3 month highs, reversing all the post Trump election losses from Nov-Dec.
The US Dollar Index was relatively unchanged on Fridays session, both the Aussie and Pound lost ground, with the Aussie not respecting the 0.77 level at all. Dollar Yen touched the 120 level early Saturday morning, the pair eyeing February support at 111.60.
While currencies haven’t decided on a direction lately (providing great range trading opportunities) the US bond market and equities have moved in opposite directions since Trumps election. This confidence in the face of Trumps unpopularity is a bullish sign for US Equity Indices.
A relatively quiet day on the economic calendar today, range trading and position pre Trump speech likely across all markets.
Economic Calendar Snapshot (All times AEDT)
Monday
AUD 11:30AM Company Operating Profits q/q
Tuesday
USD 12:30AM Core Durable Goods Orders m/m
USD 3:00AM FOMC Member Kaplan Speaks
NZD 8:45AM Trade Balance
AUD 11:30AM Current Account
Wednesday
USD 12:30AM Prelim GDP q/q
USD 2:00AM CB Consumer Confidence
President Trump Addressing Congress
AUD 11:30AM GDP q/q
CNY 12:45AM Caixin Manufacturing PMI
GBP 8:30PM Manufacturing PMI
Thursday
CAD 2:00AM Overnight Rate & Statement
USD 2:00AM ISM Manufacturing PMI
USD 2:30AM Crude Oil Inventories
AUD 11:30AM Trade Balance
GBP 8:30PM Construction PMI
Friday
CAD 12:30AM GDP m/m
USD 12:30AM Unemployment Claims
GBP 8:30PM Services PMI
Saturday
USD 2:30AM ISM Non-Manufacturing PMI
USD 5:00AM Fed Char Janet Yellen Speaks
