The response to the final Senate passing of the US tax bill has bought abought a surprisingly benign response from the financial markets, with the dollar trading mixed and stocks trading pretty much unchanged on the day. US bond yields are trading a bit higher though, and having taken out the important 2.4% level in the 10-years, are trading at 2.497%, a 9-month high, and appear to be picking up further positive momentum, contributing to the current Yen weakness. With regards to Sterling, the IMF today downgraded UK growth forecasts, citing Brexit uncertainty. Growth for 2017 was lowered by 0.1% to 1.6% and is expected to slow to 1.5% in 2018. The IMF managing director Christine Lagarde said that UK is losing out to the rest of the world in terms of growth but Sterling largely ignored the update. The Euro has moved a little higher, briefly reaching 1.1900, driven by the topside breakout of the range in EurJpy and looks as though it may have the legs to head higher still.
The metals are trading a little higher on the back of the uninspiring perfomance of the dollar, as is WTI, after data showed crude stockpiles fell for the fifth straight weekare, albeit that they are all confined to a tight range. In terms of economic data, US home sales increased more than expected in November, hitting their highest level in nearly 11 years, and the latest indication that housing is regaining momentum after almost stalling earlier this year.
Looking ahead, conditions are getting thinner by the day but there is still a fair bit of data to come pre-Christmas. Thursday will begin with the NZ Q3 GDP (exp 0.5% qq, 2.3% yy), and this will be followed in Asia by the BOJ Interest Rate Decision although no change to policy is expected. We might see some volatility in NzdJpy though! There will be very little from Europe apart from the UK PSNBR figures, while from the US we get the Q3 GDP (exp, 3.3% annualised), Philadelphia Fed Mfg Survey, Personal Consumption/Expenditure Index, and the weekly Jobless Claims. Note that Friday will also be a busy US session, headed by the Durable Goods, but also containing the Michigan Consumer Sentiment Index, Kansas Fed Mfg Activity, New Home Sales and the Personal Consumption/Expenditure Index Price Index. Have a safe holiday.
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|OIL (WTI): 58.06|