12/ 11/ 2017

Week Ahead | US Tax Reforms Jitters Slowdown the Dollar Rally

The U.S. dollar traded weak last Friday as the progress made in the tax plan was rather slow. Worries about a delay in cutting the corporate tax cut till 2019 weighed down the U.S. dollar. Further, the Fed members who spoke last week did not change the expectations for an interest rate hike in December.

Meanwhile, Euro had a mixed week with the upgraded forecasts in Europe overshadowed the Catalan crisis. The pound remained stable in spite of the political troubles faced by the U.K. Brexit talks are progressing.

The upcoming week at least will bring a more interesting macroeconomic calendar, with release of German inflation, Euro Zone GDP & inflation, and US inflation and retail sales among others.

09/ 11/ 2017

Politics to drive the market

There's been very little movement in the U.S. dollar this week, as a light economic calendar provides no big movement.  However certain developments in the political arena has managed to move the currencies. Latest development in the US Tax plan suggests few changes which were not communicated before which may hurt the dollar in the long run.

Today also brings us only mid-tier reports from Euro zone and USA. Namely Trade Balance, Imports & exports from Germany and Jobless Claims from USA. However, the key event to watch will be US Tax Bill text which will be released at a tentative time.

08/ 11/ 2017

Tax Reforms Places the Dollar Center Stage

Dollar weakens overnight on report that Senate Republicans are considering to delay corporate tax cut by a year. The greenback pared back some of this week's gains and turned mixed for the week. There are no material stats scheduled for release out of the Eurozone this morning, leaving the markets to consider what lies ahead for the Eurozone economy and monetary policy. As things stand, monetary policy divergence remains in favor of the Dollar, but with the hopes of tax reforms also priced in, it’s not all over for the EUR just yet.

With no material stats out of the UK, Bank of England Governor Carney is scheduled to speak this morning. Carney is not expected to discuss monetary policy, but he has surprised the markets before, which could provide some direction. While monetary policy continues to be a consideration, the EU has been piling on the pressure. Concerns over tax reforms weighed on the Dollar through the early part of the day as the market looks ahead to the floor vote next week. The general view is that the final reform bill will be in quite a different form to how it looks today and will likely be rolled out towards the end of the year.

07/ 11/ 2017

All Eyes on Draghi

It was a quiet day in the financial markets with no major reports to digest following Friday’s release of the U.S. Non-Farm Payrolls report. There didn’t even seem to be a hangover reaction to the jobs report. The lack of fresh economic news shifted the focus to a speech by New York Federal Reserve President William Dudley. His speech did have some impact on the markets because he talked about a potentially hot topic for the new Fed Chair Jerome Powell.

It’s another relatively quiet day on the economic calendar, with key stats out of the Eurozone limited to Germany’s Industrial Production figures for September and the Eurozone’s retail sales numbers. Following Germany’s factory order numbers released on Monday, production numbers may come in ahead of forecasts, which could provide the EUR with support, with retail sales also expected to recover from August’s decline. While the stats may be EUR positive, the markets will be looking out for comments from ECB President Draghi, also scheduled to speak this morning. Any dovish commentary will likely reverse any intraday gains, the ECB President unlikely to talk up the EUR.