18 Dec: US assets underpinned by increased expectations on tax reform. Australian MYEFO, EU CPI in focus today.

By | December 18, 2017

 

The US$ was generally firm on Friday as Republicans continued to move towards finalising the promised tax overhaul, raising expectations that the bill would be passed by year-end. The main mover of the session was Sterling, which headed lower – finding little support as Brexit negotiations formally enter their next phase after EU officials decided that sufficient progress was made in phase one. In other markets, Wall Street made yet new highs, on increasing hopes that the bill to lower corporate tax rates will be passed by year-end. The metals and WTI were both steady and rangebound.

It is going to be another busy week as we head towards Christmas, with Friday being a particularly busy session for US data (with very thin liquidity), including the Personal Consumption/Expenditure/ Income Spending – Index, Personal Income/Spending Durable Goods Orders, Michigan Consumer Sentiment Index, Kansas Fed Mfg Activity and New Home Sales. Before then Monday kicks off with the Australian MYEFO and the EU November CPI (exp 0.1% mm, 1.5% yy), while the focus on Tuesday will be on the RBA Minutes, German IFO Business Climate/Expectations and the US Building Permits/Housing Starts/Current Account. Wednesday should be relatively quiet but Thursday will be busy with the BOJ Interest Rate Decision and the US Q3 GDP (exp 3.3% annualised) along with the Personal Consumption/Expenditure. Be square before the US data on Friday. It ill be very thin indeed and the volatility is likely to be violent. Have a good week.

CURRENCIES
EURUSD: 1.1750
Res  1.1785  1.1810  1.1860
Sup  1.1730  1.1700  1.1685
USDJPY: 112.61
Res  112.75  113.00  113.30
Sup  112.45  112.30  112.05
GBPUSD: 1.3317
Res  1.3350  1.3375  1.3400
Sup  1.3300  1.3260  1.3230
USDCHF: 0.9903
Res  0.9920  0.9935  0.9950
Sup  0.9885  0.9865  0.9840
AUDUSD: 0.7640
Res  0.7660  0.7680  0.7695
Sup  0.7630  0.7615  0.7600
NZDUSD: 0.6991
Res  0.7010  0.7035  0.7055
Sup  0.6975  0.6955  0.6935
INDICES / COMMODITIES
S&P: 2683
Res  2685  2690  2695
Sup  2675  2670  2665
DJI: 24683
Res  24700  24850  25000
Sup  24570  24475  24330
ASX SPI: 6030
Res  6040  6065  6090
Sup  6010  5990  5970
XAUUSD: 1255
Res  1260  1265  1270
Sup  1250  1245  1240
XAGUSD: 16.03
Res  16.15  16.30  16.45
Sup  15.90  15.70  15.55
WTI: 57.32
Res  57.45  57.80  58.30
Sup  56.90  56.10  55.80