Morning brief for March 23

Morning brief for March 23

Today the US Congress will be voting on a key healthcare reform bill which is seen by my market experts as a litmus test for the relationship between the White House and Congress. If the bill doesn’t pass, it could delay or reduce the scope for other policies, like tax cuts and massive infrastructure spending. So, now Donald Trump is “working hard for the money” (let me borrow this line from Donna Summer’s song, it fits best for the description of Trump’s efforts) to them spend them not on the Medicare/Medicate, but on the further development of the US economy.  

EUR/USD is trading sideways within the range of 1.0775/1.0825. The result of the latest French election poll with Macron beating anti-EU Le Pen offer a little boost to the euro – it edged a few ticks higher towards 1.0790. Short-term upward momentum is slowing down, so the quotes might slide towards the nearest supports at 1.0770, 0.0745 levels. If Trump fails to push through his healthcare bill, the euro might jump above the recent high at 1.0825.

Data wise, it is going to be another quiet session with little data in the economic calendar. You would probably argue here saying: “look, how about Janet Yellen speech to be delivered at 2:45 pm MT time?” Well, I wouldn’t be so excited about it, as Fed Chair will address to the Fed’s Community Development Research Conference. There is no connection between kids and Fed’s monetary policy projections (the conference will be aimed at the economic future of children).

USD/JPY dropped to 110.70 overnight. In the early hours of the Asian session, prices moved higher as political scandal dented investor sentiment. It concerns the alleged relationship of prime Minister Shinzo Abe and his wife with a Japanese nationalist education group that bought stated-owned land at undervalued prices to build an elementary school. The impact on the yen is still from this scandal is not clear.

GBP/USD rose to 1.2475 in the course of the Asian session having remained unaffected by the news flow from London. There was an attack close to Britain’s Parliament which left 5 people dead and 40 injured. The attacker is believed to have been inspired by Islamist-related terrorism. In terms of economic data, you should focus your attention on the UK retail sales coming at 11:30 am MT time.

NZD/USD is net changed on the session. On Wednesday, the Reserve Bank of New Zealand kept its rate unchanged as it was projected by the markets. A neutral policy bias has been maintained. The technical outlook for the pair is neutral. It is expected to trade sideways between 0.6950-0.7090 for some more days.

Aussie dipped to 0.7660 in the Asian session, but the consolidation phase is still in place. Only a sustained drop below 0.7600 will signal us about the restoration of the downtrend. There was no data flow from the region. The economy calendar is almost empty.

Oil prices have finally rebounded to $51.01 after touching their lowest level ($49.70) since November when OPEC and non-OPEC members fabricated their output cut deal. A sharp downfall was caused by the official US data that showed US inventories grew by far more than it had been forecasted.

 

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