Us equities remained vigilant of the vote on President Trumps Health Care Bill with subdued trading as the outcome was awaited, turning negative when it was announced that the vote was postponed. Equity markets view the Bill a part of the fiscal program the Trump administration will be administering and therefore saving in health reform would filter through to the larger economy and affect the insurance and health sectors. The DJIA lost 0.02%, the S&P 500 lost 0.1% and the NASDAQ 100 finished lower by 0.23%.
In FX, the USD found some support against it major counterparts as the USD Index, a measure of the strength of the USD against a basket of currencies, peeked above 100. The support came about after Fed`s Kaplan commented that the 3 rate hikes this year remains reasonable and that he would not look to pause hikes for now. The GBPUSD fell from its highs of 1.2530 to now trade at 1.2475 while the EURUSD held off buyers at the 1.0800 level to trade lower. The USDJPY was the biggest gainer as we saw buyer pull the pair up by just under 100 pips on the day’s lows to close at 111.50. Commodity currencies remained under pressure too as metals and crude oil could not hold onto their gains, sliding lower.
Gold bulls managed to peek above 1250 but the air up there seemed too thin and they were quickly pushed back below 1245 as the tug of war continues. Crude oil managed to trade above $48 but with no real conviction as bears easily defended the level to drive prices lower.
Today’s key data comes out of the EU, Canada and the US. The EU sees a host of Service and manufacturing PMI`s being released which will indicate how confident businesses are of the future, given that purchasing managers are the first in line for ordering goods and services for their respective business, their views are regarded as a leading indicator to economic health. Canada sees the release of CPI data, the key determinant of inflation, which will be watched closely by traders as they try to decipher whether the Canadian economy is heating up or cooling down. Finally, from the US, we have the release of the Core Durable Goods Orders, which indicate the demand for manufactured goods with an uptick in the orders expected to result in an uptick in manufacturing and therefore an uptick in the overall economy.
Bette than expected numbers for either figures will be regarded as a positive sign for the respective country which will see buyers flock in to buy the respective currency. Should the data come out worse than expected, the respective currencies will be sold off in anticipation of a slowdown in economic growth.