Some consolidation and slight pullbacks overnight in US equities as traders await tomorrows vote in Washington on Trumps Healthcare reform plan. The vote is expected to take place during the Asian session, no time confirmed.
The VIX moved slightly higher, currently trading 12.7 after Wednesday’s low of 11.2, consolidating a 10% move in 24 hours. Gold has reversed all its March losses. The last time Gold traded these levels, the S&P500 was trading all-time highs off the back of Trumps Congress speech – with this weeks sell off, it seems US equity markets have come more into line with both Gold and US Treasury pricing.
Continued strength in the Japanese Yen, and modest falls in the Dollar Index saw the USD/JPY fall from 111.60 in the Asian session to a low of 110.73, its lowest level in four months. Previous support at 111.75 has been breached, and it will be interesting to see how Asian traders react in today’s session given subdued overnight US markets.
The Euro failed to convincingly break through the 1.080 resistance level and the pound is trading unchanged from yesterday’s European open.
A London terror attack did little to move markets. UK Prime Minister May will formally begin Brexit by triggering Article 50 of the EU’s Lisbon Treaty on Monday March 29. Negotiations that will following from the 29th will be keenly watched by traders to gauge just how smoothly the transition out of the Eurozone will be.
This morning the RBNZ this morning left its cash rate on hold at 1.75% as expected. The bank stated monetary policy will remain accommodative for a considerable period. Falls in the NZD have been welcomed; however further declines would be needed. Small moves in Kiwi on the announcement of 30 pips, currently trading 0.7045.
Pressure on Iron ore, currently trading 616 off late Feb highs of 717 has put some pressure on the AUD/USD.
UK retail sales tonight at 8:30PM, Janet Yellen speaking at 11:45PM.
