Axi | Dec 22, 2017 09:31
Originally published by AxiTrader h2 Market Summary/h2
A day after being nonplussed with the passage of the US tax bill through the House and Senate it seems stock traders decided that yes, after all, they do think the tax cuts will help valuations and the economy.
So this morning US stocks are higher by around 0.4% to 0.6% for the S&P 500, Dow, and Nasdaq. European stocks are also higher with the FTSE rising 1% and European markets making more muted gains.
Here at home it seems that after yesterday’s 15 point fall on the ASX we’ll have a better day of it in what’s like to be a half day of pretty thin trading. SPI traders have added 28 points overnight.
On forex markets the big news was the strength of Canadian retail sales and inflation (ahem folks inflation) which saw the Canadian dollar rally 0.85% against the US dollar which saw USD/CAD reverse sharply off the top of the current channel – it’s 1t 1.2722. That, and more base metal strength helped the Australian dollar take out the 200 day moving average and it sits back at 77 cents as I write. Likeiwse the kiwi is holding above 77 cents. On the other majors day on day there has not been a material move with euro at 1.1864, the pound is at 1.3375, while the yen is at 113.44 after the BoJ left rates and policy as it was at yesterday’s meeting.
On commodity markets gold's grinding rally continues. It’s at $1,267 this morning. Oil is marginally higher as more investment banks upgrade their forecasts for 2018. WTI is at $58.21 while Brent is at $64.66. Copper is higher again and if you want to use a single factor very short term model it’s responsible for the Australian dollar strength. At $3.21 a pound copper is closing in on the recent highs in what is a continuation of the recent recovery in metals.
Bonds had a quitter night. A little off recent highs but still elevated relative to recent history. US 2’s are at 1.88 while the 10’s are at 2.48%. European sovereigns remained at recent highs.
On the day it should be quiet and thin. Nothing is out in Australia but the UK releases the latest read on Q3 GDP and US durable goods are personal income data are out.
And while I’m on data – Here’s The Key Releases Of The Past 24 Hours.
Source: FXStreet
h2 Here's What I Picked Up (with a little more detail and a few charts)/h2 h2 International (everything is in this section till the new year) /h2CNBC says US companies using the tax cut to raise wages and hand out bounses could become a trend . Yeah, yeah I know, trickle down economics doesn’t work right. History proves that right, doesn’t it? Yes. BUT, that was when markets were seen to have primacy and companies free to do as they please. Now – and I’m going to write the most dangerous words in finance – This Time Is (or at least might be) Different. There is a man in the Whitehouse who might actually bully US companies to do something. I say that with great sincerity. President Trump is clearly a complex man. A billionaire who does seem to care what happens to ordinary folks, those who have been left behind by the elites and their thinking. So there is every chance that if he sees CEO’s and companies hoarding what I’m sure he’ll see as his largesse my sense is hell call them out. That’s what’s different about trickle down economics this time – there is a disruptor in the form of the American president, the most powerful man in thee world, who just might change the game. That’s my theory anyway. And if I am right the US economy and Donald Trumps re-election campaign in 2020 will have just received a big boost.
Merry Christmas everyone. Whatever your plans for this holiday weekend, I hope you and yours have a wonderful time.
Stay safe and I’ll catch you next Wednesday.
Have a great day's trading.
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