The Single Currency Still Firm, Greenback Weakens

The greenback and yen remain soft. Loonie is improved by a lift in oil prices. WTI crude oil is trading over 44. Yellow metal is trading over 1250. German 10 year yield hit the monthly maximum of 0.35%. 2 year yield reached the yearly maximum of -0.56%.The single currency was boosted by Mario Draghi’s optimistic statement about the economy and ECB’s policy steps for the future.

US Senate Republicans delayed its vote over the healthcare bill that should replace the Obamacare. This is seen as another proof of Donald Trump’s presidential disability. Due to that, DOW reduced -98.89 points (-0.46%) to close at 21310.66. S&P 500 dropped -19.69 points (-0.81%) and settled at 2419.38. NASDAQ was down-100.53 points (-1.61%) and stopped at 6146.62. Yesterday's decline indicates that the correction from 6341.70 is progressing. 55 day EMA near the medium term channel support is in the spotlight. Strong breach in that spot might cause larger decline towards 38.2% retracement of 5034.31 to 6341.70 at 5842.31, which will in turn subdue other stocks and greenback.

Janet Yellen, Patrick Harker and Neel Kashkari talked about another rate hike this year. They unanimously acknowledged that the move should be very gradual and dependant on the economy. Frans Timmermans (deputy head of the EU's executive European Commission) claimed that France started keeping up with Germany, which for a long time was considered as the leader among Eurozone economies. Philip Hammond (Chancellor of Exchequer) said that party divergence in UK will harm the whole process of separation. He stressed that the government should elaborate a transitional arrangement that would be beneficial for both sides. David Davis (Brexit Minister) claimed that the transition period will probably finish in 2022.

Today’s data is: German import price, Eurozone M3, Swiss UBS consumption indicator, US trade balance, wholesales inventories and pending home sales.