A volatile day in the markets is expected today, after Donald Trump left his tweeter account and gave his first official speech after being voted as President. The information he provided on the economic policies in the future were very little and as a result caused the Dollar to weaken. Obviously, market participants were disappointed as they were hoping to get more information on his policies but instead they heard most of his speech focus on Hacking, China, Russia and the Mexico wall. interest. Looking ahead, we get US initial jobless claims and a wave of Fed speak featuring Harker, Evans, Lockhart, Bullard, Kaplan and Yellen. ECB Minutes are also out this afternoon.
Currencies: After initially bouncing, the Dollar suffered large losses following the Trump Speech due to the fact he failed to mention measures that would help to revive the economy, such as tax cuts, deregulation or fiscal stimulus. EURUSD rebounded from 1.0453 lows to 1.0631 at time of writing. Similarly, GBPUSD – after crashing throughout most of the day – rebounded from 1.2036 to 1.2258 (30 year or low at 1.1840). Large losses were made also against the Yen, where we saw the USDJPY drop from 116.86 to 114.32 at time of writing. Elsewhere, the AUD was a big winner outperforming all other commodity currencies.
Stocks: Us stocks closed higher after a volatile session. At the close in NYSE, the Dow Jones rose 0.50%, while the S&P 500 index added 0.28%, and the NASDAQ added 0.21%. In Europe, UK’s FTSE opened lower today, after posting record highs of 7261 in the previous session. Asian Shares were mixed, with Nikkei leading losses with -0.96% and Australia rising 0.08%.
Oil and Gold: Oil had a very volatile session yesterday. It initially dropped to as low as 50.65 – a 3-week low, however after Trump’s speech, it rebounded the most in a single session in a month, and settled at 52.25. Oil’s gains came despite government data showing a bigger-than-expected weekly build in U.S. crude and fuel inventories. Gold is trading at its highest since November 23rd at $1204 an ounce. This is the 5th straight session with gains for gold and the 8th in the last 9. Prices for the metal are up more than 3.9 per cent for the year.