Dollar pairs were chillin’ like ice cream fillin’ on Monday’s New York trading session with the Donald out on vacay and Canadian banks closed for the holiday.
- Canadian banks closed in observance of Civic Day
- U.S. consumer credit down from $18.3B to $12.4B vs. $15.6B forecast
- FOMC member Kashkari: U.S. economy doing “pretty well”
- Kashkari: Wage growth still slow, reducing immigration will slow growth
Strong earnings boost equity indices
The Dow 30 index soared to its ninth straight record close as upbeat earnings and strong demand for AAPL shares boosted equity indices.
However, some analysts worried that quarterly data from the likes of Macy’s and Nordstrom due during the latter part of the week could unwind these gains. Consumer credit has slipped from $18.3 billion to $12.4 billion, much lower than the projected fall to $15.6 billion on account of weaker financial confidence.
- Dow 30 index is up 25.61 points to 22,118.42 (+0.12%)
- S&P 500 index is up 4.08 points to 2,480.91 (+0.16%)
- Nasdaq is up 32.21 points to 6,383.77 (+0.51%)
Others also joked that the stock rallies may be due to the fact that Trump is out on vacation and would likely not do, say, or tweet anything to revive political risk in the next few days. Coincidence? I think not!
Mixed views from Fed officials
A couple of Fed officials, Bullard and Kashkari, gave testimonies on Monday to share their thoughts on economic performance and potential policy tightening.For Fed official Bullard who is not a voting member of the committee, the balance sheet runoff should start soon since this won’t have much of an impact on the markets. He also mentioned that wage growth hasn’t been so bad and that it has been consistent with GDP and the current pace of labor productivity.
On the other hand, FOMC voting member Kashkari cautioned that wage growth is still slow and that reducing immigration to the U.S. could further dampen gains. Still, he assessed that the economy is doing “pretty well” and that he also supports starting the balance sheet runoff soon.
Major Market Mover(s):
Even with the pickup in risk-taking during the U.S. session, the lower-yielding Japanese currency managed to rake in some gains versus its higher-yielding rivals.
EUR/JPY is down from 130.70 to a low of 130.49, GBP/JPY slipped to 144.40, AUD/JPY tumbled from 87.65 to a low of 87.52, and CAD/JPY fell from 87.40 to 87.18.
Watch Out For:
- 12:50 am GMT: Japanese current account balance (1.51T JPY expected, 1.40T JPY previous)
- 2:30 am GMT: Australian NAB business confidence (previous reading at 9)
- Tentative: Chinese trade balance (no change from 294B CNY expected)
- 6:00 am GMT: Japanese Economy Watchers Sentiment index (rise from 50.0 to 50.1 expected)