20/ 11/ 2017

Week Ahead | Draghi & Yellen in Focus

The past week saw a drop for the US dollar as concerns about whether and when a new US tax reform plan would make its way through Congress initially weighed on both US stocks and the dollar. On Thursday, however, the US House of Representatives passed its Republican tax reform bill, alleviating some of the pressure on equities and, to a lesser extent, the dollar.

The week ahead will be slower in terms of economic data than the past week. Contributing to this slowdown will be the major Thanksgiving holiday in the U.S. Aside from speeches by heads of key central banks, including the European Central Bank, Reserve Bank of Australia and Federal Reserve the week will be dominated by the release of minutes from several central bank meetings. These minutes will be from the RBA, Fed, and ECB. Also included in the week’s schedule will be US durable goods orders, Eurozone services and manufacturing PMI data, UK GDP.

16/ 11/ 2017

US Tax Reforms to Drive the Market

Euro rose sharply against all major currencies on the back of strong economic data and hints given by Draghi on Monetary policy strengthening at a conference in Frankfurt, Germany. The U.S. dollar went on a rollercoaster ride yesterday as investors tried to make sense of the latest economic reports.

Next 48 hours will be key for Dollar largely because of tax reform bill. The House is set to vote on their tax plan today, which is a formality at this stage as the market focuses on the Senate bill. Along with this US Jobs reports and Euro zone Inflation data will drive the markets until closure on Friday.

15/ 11/ 2017

A Big Day ahead for the Dollar and the Pound

Trading was volatile across the board on Tuesday as investors reacted to a plethora of information including comments from Fed members, U.S. producer inflation data, Euro Zone economic data and a possible warning from the bond market. The Fed commentary started early with Chicago Federal Reserve Bank President Charles Evans calling for a new approach to rate-setting that would allow the central bank to respond to shocks when interest-rate cuts alone are not enough.

The economic calendar is full of key data today. UK job data will be a major focus in European session. Sterling is trading as the weakest European and will need to draw support from very solid data. Eurozone will also release trade balance. Later in the day, US CPI and retail sales will be the main feature. Empire state manufacturing index and business inventories will also be featured.

14/ 11/ 2017

Will Draghi Talk down the Euro?

Pound had a negative start to the week, as markets reacted to the news of “No Confidence” letter against UK PM Theresa May while the EU negotiator for Brexit Michel Barnier stated that EU was preparing itself for the possibility of the collapse of the talks. Euro gained some of its lost momentum with a weaker dollar performance.

Dollar weakness across the board gave in way for other currencies to crawl back as the US tax reform uncertainty continued to weigh on the sentiment. The Senate Finance Committee released its draft tax bill, which differed from the House Republicans’ plan and proposed to delay implementing a cut in corporate tax to a 20% rate from 35% until 2019.

Today brings us key speeches and top tier economic reports from across the board. Out of the speeches Draghi’s speech will be monitored closely by the markets as his view on the EU monetary policy will come under scrutiny.