- US equities ended the session basically flat, after Trump released his tax plan. As expected, the proposal lacked detail. A bullet point page outlined a reduction to the corporate tax rate to 15 percent from 35 percent, and a ‘one time tax’ on monies held by corporates offshore. No border adjustment tax mentioned.
- The threat of a government shutdown continues; funding ends this Friday. Congress now has a hard deadline to pass a comprehensive funding bill and negotiations on Trumps wall, military spending and healthcare will need to take place this week.
- Gold finding support at the 1,260 area. Government Shutdown could see some short term buying.
- Crude oil inventories down -3.6M overnight, a larger than expected reduction in inventories, however all gains reversed surprisingly, now trading 49.41. The market not pleased with success of supply cuts from OPEC producers and growing stockpiles of gasoline & distillates.
- 130 pip range in the EUR/USD this week, after Mondays gap open. Choppy trade has resulted – look to tonight’s ECB press conference for direction. Clear uptrend on the daily since December – next target 1.10 level, the high of the uptrend channel.
- Price action in all EUR and JPY pairs to pick up today due to a packed economic calendar on Thursday.
- Eurozone waiting for tonight’s ECB press conference. Analysts expecting Mario Draghi to reiterate “improvement to economic growth and inflation, but with risks remaining”. French election and low inflation likely to feature in the comments tonight as immediate risks.
- Dovish tone from the BOJ today will see EUR/JPY rally through to 122 – 122.85, testing recent resistance.
Today’s Economic calendar (AEST)
- Bank of Japan Monetary Policy Statement (time not available)
- 4:30pm – BOJ Press Conference
- 7:10 RBA Gov Lowe Speaking
- 9:35pm Eurozone Minimum Bid Rate
- 10:30pm ECB Press conference
- 10:30pm US Core Durable Goods
- 10:30pm US Unemployment Claims
