Asian markets trading very cautiously as the stock market moves slightly lower. Dollar remains in a consolidation phase and waits today’s macroeconomic news before choosing further direction.
We had a historic agreement from OPEC to freeze the oil production. Oil at the moment is traded above $50 (12% up since OPEC) and the outlook remains extremely bullish. Bearish corrections at this point should be consider as buying opportunities.
Today we should focus of the Fed speakers Mester , Dudley and Powell , European and U.S manufacturing PMI’s . Yesterday was announced that Mnuchin will be the next Treasury Secretary, the US treasuries plunged as the new minister aims to achieve 4% growth and to continue to the largest tax cut since Regan period.
U.S equities move lower, higher USD does not mean necessarily that U.S equities will drop. Unquestionably a weak USD helps U.S equities and make U.S companies more competitive abroad, because of market expectations for future growth and Trump’s infrastructure plans.
For today we see signs for a risk-on as macroeconomic news worldwide has some improvements this week. Market continues to expect a hike next month which boost USD higher.
It seems that in 2017 the political risk will rise in Europe as we got the Austrian, Netherlands, France and Germany elections and the article 50 in UK.
Daily Key points:
• Fed’s Kaplan: Would advocate further rate hikes in 2017
• Merkel opposes new talks with Turkey on European accession
• U.S. 10 – year treasury yield on track for biggest one month rise since December 2009 with rise of 50BPS
• Russell 2000 up over 11% this month
• RBS fails stress tests, Barclays stumble over hurdles
• Italy’s Renzi says banking problems will be addressed after Sunday’s referendum
• Euro zone flash CPI hits 2 ½ year high in November
• Fed’s Powell: Until rates reach 1.5%, the Fed in risk management mode
• USD/JPY best month 9% since August 19951
• Japanese capital spending falls for first time since 2013
Daily Economic calendar:
|Spain||Spanish Manufacturing PMI||Medium||53.3||53.7||Euro||11:15|
|Italy||Italian Manufacturing PMI||Medium||50.9||51.4||Euro||11:45|
|France||French Final Manufacturing PMI||Medium||51.5||51.5||Euro||11:50|
|Germany/td>||German Final Manufacturing PMI||Medium||54.4||54.4||Euro||11:55|
|Europe||Final Manufacturing PMI||High||53.7||53.7||Euro||12:00|
|Italy||Italian Monthly Unemployment Rate||Medium||11.7||11.6||Euro||12:00|
|USA||ISM Manufacturing PMI||High||51.9||52.1||USA||18:00|
|Australia||Retail Sales m/m||Medium||0.6||0.3||AUD||3:30|