Bullet Report: Markets await Trump’s first real Speech today (not via Twitter)
It is another quiet day in terms of financial data releases, however Donald Trump is scheduled to speak for the first time since 167 days in an official press conference in NYC where he will talk about his presidency goals. As we know, Stock markets went ahead of themselves and rose following his win (5% rise), as markets expect his infrastructure spending and employment incentives as well as tax breaks will revive the economy further. Nevertheless, a clear strategy was not communicated as of yet, so today’s press conference might have a significant effect on the Dollar and other asset classes such as stocks and commodities.
Currencies: The Dollar has been steady, albeit trading in large ranges yesterday and today, as investors wait for Trump’s speech later this afternoon. The dollar index hit a 14-year high last week, having touched highs of 103.82 but has retreated slightly ever since then. EURUSD has traded between 1.0620 and 1.0530 however the EURGBP pair is climbing higher based on GBP weakness which has trended lower following this weekend’s comments from the UK PM. The Sterling will be vulnerable to more losses should the support of 1.2090 break. The GBPUSD is now sitting close to the post Brexit referendum albeit economic data has been positive lately. The country will today release industrial production and manufacturing data which could set the tone for future direction.
Stocks: Stock markets show a mixed picture. The German DAX is swinging within a large range, between positive and negative territory, while UK’s FTSE continues reaching all-time highs despite Brexit worries. Asian shares rose to 2 month highs overnight, with Nikkei leading the surge with a 0.45% gain. On Wall Street, the S&P 500 ended flat on Tuesday as investors looked to the start of the earnings season this week to assess if record market levels are justified, following a 5% gain since the election.
Oil and Gold: Crude oil has dropped 2% under $51 a barrel extending the previous day’s selloff on continued supply concerns as Iraq, OPEC’s largest producer after Saudi Arabia, announced it’d raise crude exports from Basra port to an all-time high in February. GOLD continued its rise from yesterday, hitting a fresh 6 week high as the market worries on renewed Brexit risks and Trump’s speech later this afternoon. Gold, often seen as an alternative investment during times of political and financial uncertainty, benefits from the risk-averse sentiment in the market.
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