The US$ remains firm on Wednesday following the release of the Durable Goods orders, which rose by 1.7% in August, versus consensus of 1.0%. The good figures were then backed up by Donald Trump’s tax proposal, to cut corporate income tax rates, cut taxes for small businesses, reduce the top income tax rate for individuals and scrap some widely used tax breaks. In the bigger picture though, markets remain skeptical that the reform will pass through Congress and the dollar failed to make much new headway. The S+P liked what it heard and made a new all-time high although the DJI failed to do so and remained rangebound. Gold and Silver are under pressure from the firm dollar, while WTI had a tight range and remains unchanged from yesterday.
Thursday will commence with the NZ Interest Rate Decision although no change is expected from the RBNZ with rates to remain on hold at 1.75%, while the main focus is likely to be on the accompanying statement with the chance of a hawkish lean, which could see a rally in the Kiwi. Most analysts expect little change in tone from the previous meeting. – NB> The RBNZ just left rates on hold and the Kiwi is off its highs but remains within the day’s range.
The Fed’s Rosengren will be speaking at the same time, so traders will be looking for any dovish/hawkish lean in either direction, while later in the Asian session, the BOJ’s Kuroda will be speaking. It will be a big day for central bankers as the ECB’s Praet, the BOE’s Carney and the RBA’s Debelle will be the next cabs off the rank during European hours. In terms of data, the German provisional CPI for September will take top billing in Europe (exp 0.1%mm, 1.8%yy), while the US has the Q2 GDP (exp 3% annualised), the Core Personal Consumption/Expenditure for Q2 (exp 0.9%), the Wholesale Inventories, weekly Jobless Claims, Kansas Fed Mfg Activity and the Goods Trade Balance. Also coming up will be speeches from the Fed’s George and Fischer.
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