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Word on Wall Street is that financial deregulation is next on the Trump administration’s agenda, lifting the Nasdaq to a new record high and allowing dollar bulls to charge.

  • U.S. labor market conditions index up from upgraded 3.5 figure to 3.6 in April
  • Canadian housing starts down from 253K to 214K vs. 220K forecast
  • U.S. Financial Stability Oversight Council met to discuss Volcker Rule
  • Treasury committee on deregulation not likely to complete review by June
  • U.K. BRC retail sales monitor rebounded by 5.6% in April

Major Events:

Talks of Wall Street deregulation

After recently getting the Obamacare repeal through Congress, the White House now seems to be focusing its efforts in sweeping another set of reforms introduced by the previous administration under the rug.

The Financial Stability Oversight Council, which is headed by Treasury Secretary Mnuchin, held a closed-door meeting to discuss the Volcker Rule. This regulation sets limits on proprietary trading by banks and financial institutions to prevent client funds from being misappropriated and to curb excessive risk-taking.

In a brief statement after their meeting, the committee said they “discussed efforts to assess the efficacy” of the rule as part of the Donald’s direction to have a review ready by next month. However, sources say that this review likely won’t be ready by then and might take until October to complete.

Stronger U.S. labor market conditions

Based on the Fed’s labor market conditions index, which provides a quick assessment of the employment situation by looking at 19 different indicators, improvements have been pretty consistent on the jobs front.

The index came in at 3.5 in April, up from the earlier 0.4 figure which was then upgraded to 3.6. This underscores the stronger than expected 211K increase in hiring last month, outpacing the consensus at 194K and the earlier 79K reading.

  • Nasdaq rose 1.9 points to 6,102.66 (0.03%)
  • Dow 30 index climbed 5.34 points to 21,012.28 (0.03%)
  • S&P 500 index rose 0.09 points to 2,399.38 (0.00%)

Major Market Movers:

USD

Dollar bulls sprang back to action on expectations of more reforms from the Trump administration and another report highlighting labor market improvements.

EUR/USD continued to retreat from 1.0939 to 1.0916 (-0.21%), USD/CHF popped up from .9931 to a high of .9992 (+0.61%), USD/JPY is up from 112.51 to 113.34 (+0.74%), and USD/CAD recovered from 1.3671 to a high of 1.3735 (+0.47%).

 

Watch Out For:

  • 1:00 am GMT: Japanese average cash earnings (0.4% expected, 0.4% previous)
  • 2:30 am GMT: Australian retail sales m/m (0.3% expected, -0.1% previous)