The Greenback managed to chalk up some gains against most of its counterparts as the Senate version of the bill advanced, but the currency was still on shaky footing.
Meanwhile, the pound was the strongest of the bunch as improving sentiment towards Brexit paved the way for another day in the green.
- U.S. preliminary GDP upgraded from 3.0% to 3.3% as expected
- U.S. preliminary GDP price index down from 2.2% to 2.1%
- U.S. pending home sales up 3.5% vs. 1.1% forecast
- U.S. crude oil inventories down by 3.4M barrels vs. projected 2.5M drop
- Fed head Yellen optimistic about U.S. economy in her speech
- Senate version of tax bill passed Senate Budget Committee, procedural vote today
- OPEC to review output deal by June even with nine-month extension?
OPEC meeting jitters
With the OPEC still busy discussing the fate of the crude oil market, traders have been paying extra close attention to remarks from energy ministers and insider sources after the first round of talks.
As it turned out, Russia appears willing to participate in the recommended nine-month extension of the output deal, which would effectively last until the end of 2018. However, the non-OPEC member is also suggesting a review of the agreement and market conditions by June to see if they should call it quits by then. Russian energy minister Novak remarked:
“The market has not been fully balanced yet. Joint efforts are needed after April 1. Everybody has recommended that the agreement could be extended and tomorrow such concrete details will be discussed.”
Saudi Energy Minister Khalid al-Falih reiterated that production caps are necessary to ensure that the market gets rebalanced while Iranian oil minister Bijan Zanganeh also seemed inclined to support an extension of six to nine months.
- WTI crude oil is down to $57.32 per barrel
- Brent crude oil dipped to $62.59 per barrel
One step forward for Senate tax bill
So far so good for the Senate version of the tax reform bill as it was able to successfully clear the Senate Budget Committee, moving on to a full vote possibly before the end of the week.
As it turned out, President Trump pulled a Frank Underwood in engineering a last-minute deal with Republican Senators Collins, Corker and Johnson who have previously been expressing opposition to the current version of the bill.
U.S. equity indices cheered this progress but the Nasdaq ended in the red due to a weaker performance from the tech sector:
- Dow 30 index is up 103.97 points to 23,940.68 (+0.44%)
- S&P 500 index is down 0.97 points to 2,626.07 (-0.04%)
- Nasdaq is down 87.97 points to 6,824.39 (-1.27%)
Still, there are doubts that the bill could make it all the way through as a number of senators have some concerns.
Major Market Mover(s):
The pound continued to rake in gains for yet another day as traders warmed up to the idea that Brexit negotiating teams are starting to work more harmoniously.
GBP/USD edged up from a low of 1.3380 to a high of 1.3448, GBP/JPY is up to 150.62, EUR/GBP slid lower to .8826, and GBP/NZD surged to a high of 1.9628.
The scrilla also chalked up decent gains but still appeared hesitant to head further north until the Senate actually votes on the tax bill.
The U.S. GDP upgrade and optimism from Fed head Yellen in her latest testimony helped prop the currency higher, but traders soon returned some of these gains as they realized that the central bank’s leadership is about to change soon.
USD/CHF ticked up to a high of .9870 then fell back to .9840, USD/JPY pulled up from a low of 111.51 to a high of 112.15, AUD/USD fell further to a low of .7554, and USD/CAD is up to a high of 1.2868.
The Loonie edged lower against its rivals as traders became increasingly nervous about the outcome of the ongoing OPEC meetings.
CAD/JPY fell to a low of 86.78, EUR/CAD advanced to 1.5257, GBP/CAD is up to 1.7281, and AUD/CAD popped up to .9756.
Watch Out For:
- 12:00 am GMT: New Zealand ANZ business confidence index
- 12:30 am GMT: Australia private capital expenditure q/q (1.1% expected, 1.1% previous)
- 12:30 am GMT: Australia building approvals (-0.9% expected, +0.6% previous)
- 1:00 am GMT: Chinese official manufacturing PMI (dip from 51.6 to 51.5 expected)
- 1:00 am GMT: Chinese official non-manufacturing PMI (54.3 previous)