Trump policy speech impact on foreign exchange market and stock markets, ForexSQ experts conducted all you need to about Forex and stock markets before Trump policy speech.
Trump Policy Speech
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U.S. stocks fell, with small caps sliding the most in a month, while Treasuries advanced as a tone of caution spread through financial markets before Donald Trump’s address to Congress Tuesday night.
The Russell 2000 Index sank more than 1 percent and the Dow Jones Industrial Average was poised to halt its longest rally in 30 years, with losses accelerating after Orin Hatch suggested on CNBC that it is “very difficult” to change the current tax system. The greenback retreated versus its major peers, while the yield on 10-year Treasury notes fell below 2.35 percent after revised growth data indicated slower investment by businesses offset stronger household purchases.
Hatch’s comments add to the cacophony from politicians speculating on the prospects for Trump’s promised spending increases and tax cuts before the president outlines his priorities at 9 p.m. in Washington. Investors seem unwilling to add to riskier bets as they await details and assess how the talk impacts the Federal Reserve’s intentions on interest rates.
“Tonight is going to be about laying out the agenda,” Paul Kavanagh, chief executive officer of Patronus Partners Ltd. in London, said in an interview on Bloomberg radio. “The bond markets and the stock markets are going to be listening. To push through on many of the initiatives that he’s looking for over the next few months, he’s got to be relatively downbeat about the things that he will want to change.”
What’s coming up this week:
- Trump is expected to outline his priorities for the nation in an address before a joint session of Congress on Tuesday night in the U.S.
- Fed officials are making speeches this week, including Chair Janet Yellen who addresses an event in Chicago on Friday.
- This week’s economic data include U.S. personal income and spending. India and Australia will report on fourth-quarter GDP. China’s PMI data are expected to show continued expansion.
Here are the main moves in markets:
Stocks
- The S&P 500 Index declined 0.4 percent to 2,360.34 at 12:32 p.m. in New York, paring the best monthly gain since March to 3.6 percent.
- The Dow is in jeopardy of halting a record-matching streak of closing at all-time highs. The blue-chip index has jumped 4.7 percent in February, looking for a fourth straight monthly advance.
- The Stoxx Europe 600 Index added 0.2 percent after four straight days of losses. The measure pared its gain in the month to 2.8 percent.
- Asia stocks erased gains after Japan’s Topix gave up almost all of a 1 percent rise, with the steepest paring coming in the final half hour of trading. The MSCI Asia Pacific Index trimmed its monthly gain to 2.2 percent.
Currencies
- The Bloomberg Dollar Spot Index fell 0.1 percent in Forex market.
- The yen added 0.4 percent to 112.70 per dollar, after sliding 0.5 percent Monday to snap a three-day winning streak.
The British pound slipped 0.2 percent to $1.2420. The currency is down 1.3 percent for the month.
Bonds
- Yields on 10-year Treasuries slipped one basis point to 2.35 percent after climbing five basis points on Monday.
- European government bonds traded in a tight range. The German 10-year yield rose one basis point to 0.21 percent. Peripheral bonds extended Monday’s gains as 10-year Italian yields fell three basis points to 2.1 percent.
Commodities
- West Texas Intermediate Crude fell 1.2 percent to $53.44 a barrel. Brent Crude retreated 0.9 percent to $55.43.
- Gold climbed less than 0.1 percent to $1,253.49 an ounce. The metal has gained 3.5 percent in February, its second monthly advance.
