mask Draghi's Dilemma; To Taper or Not to Taper

27/ 04/ 2017

Draghi's Dilemma; To Taper or Not to Taper

Daily Update - 27th Apr 2017

Yesterday’s Market

  • AUD Consumer Price Index
  • USD US President Donald Trump's Speech on Tax Plans

The AUD has been beaten down after yesterday’s CPI report, which suggests that the RBA will remain accommodative for the foreseeable future and the acute bid that transpired on the USD post-US Tax rhetoric.

President Donald Trump unveiled a one-page plan on Wednesday proposing deep U.S. tax cuts, many for businesses, that would make the federal deficit balloon if enacted, drawing a cautious welcome from fiscal conservatives and financial markets.

While the proposed tax cuts would please those helped by them, such as multinational corporations and wealthy taxpayers, Trump's package fell far short of the kind of comprehensive tax reform that both parties in Washington have sought for years.

Today’s Market

  • JPY BoJ Interest Rate Decision & Monetary Policy Statement
  • EUR Eurozone Consumer Data, ECB Rate Decision, Monetary Policy Statement & Press Conference
  • USD Durable Goods Orders, Initial Jobless Claims, Pending Home Sales

Today’s Focus

Busy day for forex market as key decisions and guidance awaits from ECB. Early morning the Bank of Japan is to announce its benchmark interest rate and publish a policy statement which outlines economic conditions and the factors affecting the monetary policy decision. The announcement is to be followed by a press conference.

In the euro zone, Germany is to release preliminary inflation data. Following the ECB is to announce its Rate decisions and latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi. The key question for the financial markets is, whether Draghi will provide info on when ECB will begin to taper and recalibrate its QE programme to reflect the pick-up in the Eurozone’s economic data.

The day will end with Durable Goods Orders, initial jobless claims and pending home sales reports which will be released from USA.