Greenback Shrugs Off Trump’s Speech, Further Volatility In Store

Market Reviews

Markets showed no reaction to Donald Trump’s speech at the State of Union. Greenback has once again weakened. Moreover, further drop is projected. DOW fell -362 points and stopped at 26076.89, unfolding the short term correction. The index is expected to hit 25000 handle. 10 year yield rose 0.030 to 2.726. Today, Fed will have a meeting, where members are expected to deliver some hints about a rate hike in March (the odds are at 70%), their economic outlook and the judgment of dollar’s continuing softness.

Sterling remains the strongest. The currency is boosted by comments from Mark Carney (BoE Governor). The Governor stated that economic downturn has been averted and BoE can now regulate using traditional monetary policy tools. Carney promised that inflation will be directed towards its stable target.

Japan consumer confidence remained at 44.7 this month. Housing starts reduced -2.1% yoy and industrial production increased 2.7% mom in prior month. Australian Consumer Price Index rose from 1.8 yoy in the third quarter to 1.9% yoy in the fourth quarter. The trimmed mean CPI is holding at 1.8%. The weighted median CPI lifted from 1.9% to 2.0%. China official manufacturing PMI declined-0.3 pt to 51.3 this month. Non-manufacturing PMI grew 0.3 pt to 55.3. British Gfk consumer confidence increased to -9 this month. BRC shop price index was down -0.5% yoy.

Today’s data marks: German retail sales and unemployment, Eurozone Consumer Price Index and unemployment, Swiss UBS consumption indicator, US ADP employment, employment cost index, Chicago PMI and pending home sales and Canada’s Gross Domestic Product, IPPI and RMPI.