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USD Index Largely Unchanged; Economic Data, Presidential Speech the Focus

Published February 28, 2017
  • Topic of conversation today is President Trump’s expected address to Congress at 21:00 ET, where he is expected to lay out his plans for the year including a healthcare overhaul and military buildup
  • Markets will be looking for details on fiscal stimulus and deregulation
  • Odds of a rate increase at the Federal Reserve’s March meeting have jumped 10 points to 50% with little clarity on any single factor for the quick uptick
  • Canadian PPI for January increased 0.4% MoM with energy and petroleum products largely responsible for the gain, keeping the YoY at 2.3%, the same pace as in previous month
  • US GDP growth for Q4 advanced an annualized 1.9% weaker than consensus 2.1% and the previous period of 3.5%
  • Similarly, PCE – the component that measures good & services targeted towards and consumed by individuals – came in two tenths of a percent lower than expected at 1.9%
  • US home prices rose more than expected and US wholesale inventories fell unexpectedly in January
  • US Goods Trade Balance -$69.2B compared to -$66B
  • CAD remains under pressure this morning amid renewed NAFTA fears and following Fed speaker Kaplan’s comments yesterday, feeding the US rate hike expectation in March
  • USD remained steady against its G10 counterparts save for the GBP which continued its three day drop
  • Oil was broadly down and prices continue to trade in a tight range despite OPEC's production cuts, offset by increasing crude production from the United States
  • Gold traded down after falling from a 3-1/2 month high in the previous session

Chart (1) DJIA Performance During Presidential Terms (source: Bespoke Investment Group)