Spotlight shines on State of the Union address, Fed Reserve meeting takes a back seat
A packed day of announcements and events should ensure plenty of volatility (and opportunity) for traders.
The EUR/USD went on a roller coaster ride throughout the trading session, hitting session lows of $1.23383 early last night before taking off, adding over 1 cent. Session highs of $1.24538 were reached later in the night, then it gave up some of those gains. It is currently trading at $1.24024. The GBP/USD followed a similar trend, although it maintained just about all of its gains. It reached session lows early, hitting $1.39780, then steadily climbed throughout the rest of the session. It hit a high of $1.41667 before pulling back slightly to be currently trading at $1.41493.
The Dow got hammered yesterday, dropping over 600 points, hitting a session low of 26,030.00 on the back of poor company results, particularly from Apple. It is not far from those session lows, currently trading at 26,064.30. The State of the Union address by Donald Trump could influence the direction of the Dow as infrastructure is expected to form part of the President’s speech. The Dax continues to under-perform, weighed down by a strong Euro and the political uncertainty in Germany as Angela Merkel negotiates with other parties to form government. The index plummeted to session lows of 13,170.46. It has recovered slightly, currently trading at 13,197.81.
All eyes are on Donald Trump’s State of the Union speech in a few-hours time. This will reflect on the state of the country and the economy over the previous 12 months, while also outline plans for the upcoming 12 months. Traders will be wise to keep an eye on this address as it is expected to affect USD-paired currencies as well as the US indices (Dow, NASDAQ, S&P 500). Donald Trump is expected to talk about infrastructure spending, trade and jobs, among other things in the US economy. Also of importance is the Fed Reserve meeting being held in the early hours of tomorrow morning. While there has not been much talk of a rate rise, it will be crucial to observe the speech that accompanies the rate decision as this may give clues to the outlook of future monetary policy settings, as well as the outlook for the US economy.
Other announcements set for release today include:
China – Manufacturing & Non-Manufacturing PMIs
Australia – CPI & Trimmed Mean CPI, Private Sector Credit
UK – BRC Shop Price Index, GfK Consumer Confidence
Canada – GDP, RMPI, IPPI
Japan – BoJ Summary of Opinions, Prelim Industrial Production, Consumer Confidence, Housing Starts
US – ADP Non-Farm Employment Change, Employment Cost Index, Chicago PMI, Pending Home Sales, Crude Oil Inventories
Europe – German Retail Sales, Credit Suisse Economic Expectations, UBS Consumption Indicator, French Prelim CPI, Spanish Flash CPI, German Unemployment Change, Italian Monthly Unemployment Rate, European CPI & Core CPI Flash Estimate, European Unemployment Rate
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