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With not a lot of data on the docket, Asian session forex traders stayed in the sidelines as they waited for the U.S. House to vote on the tax bill.

  • NZ Westpac consumer sentiment slips from 112.4 to 107.4 in Q4 2017
  • NA ANZ business confidence improves from -39.3 to -37.8 in December
  • RBA publishes December meeting minutes
  • Japanese government upgrades 2017 and 2018 growth forecasts

Major Events/Reports:

RBA’s meeting minutes

Earlier today we saw the Reserve Bank of Australia’s (RBA) meeting minutes. If you recall, the Aussie received a boost from the statement published early December because members took a chill pill on their jawboning.

Well, RBA members aren’t any less optimistic in the minutes. They still believe that the global economy had improved in 2017 while leading indicators point to Australia’s GDP printing around the economy’s current trend. Business conditions also remain high and output and non-mining investment have picked up.

Consumption is raining on the economy’s parade, however, as it slowed in Q4 and continues to be “a significant risk” since “household incomes were growing slowly and debt levels were high.”

RBA also remained peachy about the labour market, saying that the unemployment rate had fallen to a four-year low. And while wage growth was been “a little lower than expected,” leading indicators still point to “continuing strength” in the jobs market.

Japan’s GDP forecasts

Steady domestic demand and stronger exports growth has convinced Japan’s Cabinet Office to upgrade its growth forecasts for 2017 and 2018.

The office now sees the economy growing by 1.9% (from 1.5%) in FY2017 and 1.8% (from 1.4%) in FY2018, which are stronger than the government’s forecasts back in July.

Consumer inflation is expected to be a challenge since it’s only estimated to grow by 0.7% in 2017 and 1.1% in 2018. Jobless rate is expected to fall from 2.8% to 2.7% from 2017 to 2018, however.

Last but not the least, external demand is expected to contribute 0.3% in the GDP in 2017 and 0.1% in 2018, while government expenditure is projected to rise by 1.2% in 2017 and 1.4% in 2018.

All eyes on the tax bill vote

Yesterday the U.S. House Rules Committee voted to hold the House vote for the GOP tax bill on Tuesday afternoon. If the bill passes, then the Senate could vote on it as early as late Tuesday or Wednesday and get the bill on the Donald’s desk by the end of the week.

But market players have mostly priced in the passing of the bill and now they’re waiting for the GOP to deliver.

The wait and see mode kept Nikkei flat for the session, but
Australia’s A SX 200 is up by 0.29% to 6,086.6;
Hang Seng is up by 0.83% to 29,291.1, and
Shanghai composite is up by 0.53% to 3,285.364.

It didn’t stop commodities from sneaking in a few more gains, however.

Gold is up by 0.03% to $1,262.05;
WTI crude is up by 0.02% to $57.34, and
Brent crude oil is up by 0.09% to $63.49.

Major Market Mover(s):

USD

The Greenback continued to lose out against its major counterparts ahead of the expected tax bill vote from the U.S. Lower House.

EUR/USD inched 5 pips higher (+0.04%) to 1.1789;
GBP/USD rose to 1.3380 after dipping to 1.3361, and
USD/CAD slipped by 2 pips (-0.02%) to 1.2867.

Watch Out For:

  • 6:45 am GMT: Switzerland’s SECO economic forecasts
  • 9:00 am GMT: Germn IfO business climate (117.6 expected, 117.5 previous)