All eyes on the US
Another busy day for markets, with plenty of central bank figures speaking. There is also some crucial data emanating from the US.
The EUR/USD weakened overnight, dropping from highs of $1.19197 to go as low as $1.18264, then rebounding to its current level of $1.18456. It appears to be a weakening of the Euro, rather than a strengthening of the USD, as other currency pairs climbed higher against the USD. One such currency is the pound. It was trending lower, then it shot upwards as it appeared that an agreement had been made over the Brexit bill, which is the financial compensation that the UK will pay to leave the EU. This agreement has added certainty to the Brexit process and shows that negotiations are moving along. The GBP/USD fell from $1.33574, to a low of $1.32193, before rocketing back up to reach a high of $1.33870. It has since pared some of those gains, where it is presently trading at $1.33491.
US stocks all gained overnight as confidence grew over the new tax plan, which is getting closer to being implemented. The Dow and S&P 500 trended upwards for most of the night, while the NASDAQ had some violent movements, before settling higher. The Dow was the biggest beneficiary from the tax talk, surging over 300 points from its lows of 23,544.00. The Dow peaked at 23,847.00 and has dropped slightly since, trading currently at 23,825.50. The S&P 500 climbed throughout the night, going from a low of 2,598.00 to highs of 2,628.03. It is not far off that high, now at 2,626.97. There was more volatility in the NASDAQ, climbing around 30 points, then shedding 40 points, before regaining those losses to its current level of 6,416.20. The DAX started the night lower, dipping as low as 12,964.10 before climbing to highs of 13,129.22, a gain of over 150 points. The FTSE had a more volatile trading session, going from a low of 7,381.80, all the way up to 7,472.35, then pulling back from those highs, where it is currently trading at 7,437.38.
Turning to the day ahead and there is plenty of activity. From a data perspective, all eyes will be focused on the US Prelim GDP. There are also some central bank figures due to speak. Fed Chair Janet Yellen is due to testify before the Joint Economic Committee of Congress. Fed Member William Dudley is also due to speak. BoE Governor Mark Carney and MPC Member David Ramsden from the UK are also due to speak. Other data set for release today includes:
All – OPEC Meetings
Japan – Retail Sales
New Zealand – RBNZ Governor Grant Spencer speaks
UK – BRC Shop Price Index, Net Lending to Individuals, M4 Money Supply, Mortgage Approvals
US – Prelim GDP Price Index, Pending Home Sales, Crude Oil Inventories, Beige Book
Europe – Swiss UBS Consumption Indicator, Credit Suisse Economic Expectations, German Prelim CPI, French Consumer Spending & Prelim GDP, Spanish Flash CPI