Forex today: wait and see what Trump delivers

The market was mixed ahead of Trump’s inaugural speech to Congress. Meanwhile, the greenback was under pressure in Europe and mostly in the US session along with US yields and stocks on the back foot. This came with a mixed bag of data from the US economy as well. 

AUD/USD was a 40 pip range to the downside while the euro was a 60 pip range with the dollar recovering in part throughout the session with the DXY lower by just 0.1%. Sterling was a subdued performer and range-bound in Europe and weak in the US session while the yen firmed up and Gold dropping back by $9.00. US 10yr treasury yields were lower from 2.37% to 2.35% while 2yr yields were moving sideways between 1.19% and 1.20%. 

Economic Wrap:

US data offer GDP Q4 that was unchanged at 1.9% vrs the consensus for a revision to 2.1%. This weighed on the US market although the background of the data did show some signs of positive life to the picture with personal spending that was up from 2.5% to 3.0%. Wholesale inventories fell 0.1% in Jan vs the +0.4% expected. Januarys advance trade deficit was much larger than expected: $69.2bn vs $66bn and that is a weight on the dollar given it could mean negative revisions to Q1 expectations. Conference Board consumer sentiment was higher from 111.6 to 114.8 vrs the 111.0 expected. Lastly, the Richmond Fed manufacturing was also higher and moved up from 12 top 17 (10 expected).Chicago PMI was higher from 50.3 to 57.4 vrs the 53.5 expected). 

Day ahead:

We have NZ: Q4 terms of trade, Australia: Q4 GDP, China: Feb Caixin and Markit PMI Trumps address to Congress, Eurozone CPI published tonight and a great deal of US data  including US personal income, headline PCE inflation, ISM and Markit manufacturing PMI’s along with Fed speakers Williams, Bullard, and Kaplan.

When is Trump's address?

On US President Trump’s address that will be (live streamed at 1pm Sydney time, 9pm Eastern, 2am GMT, analysts at Westpac explained that the address to a joint sitting of Congress is eagerly awaited by traders and economists with any detail on fiscal plans and their timing to be closely scrutinised. 

Main topics in U.S. session:

• White House Spokeswoman: There is no ethanol executive order in the work
• China, US affirmed importance of "constructive bilateral relationship" - State Dept
• Aussie current account balance a plus for the Aussie - Nomura
• Popular delusions, the madness of crowds and French Politics - Westpac
• NZD/USD rallies above critical 0.72; dollars bulls 'nowhere to be found'
• AUD/USD eyes a test of the 0.77 handle
• Greek Fin Min: If the IMF is included in the preliminary deal, inclusion in QE will be easy