Trump rhetoric continues to keep markets on edge
Yesterday proved another jittery session across financial markets as participants continue to lose appetite for risk this week.
Further strong rhetoric coming from the Trump administration kept moves for the dollar and euro particularly choppy. Yesterday’s highlight centred on comments made by the president’s trade advisor Peter Navarro, who took aim at a “grossly undervalued” euro providing competitive advantage to Germany, allowing them to “exploit” the US and EU partners. EURUSD spiked during the session climbing to highs not seen since November last year, with trading currently sustained around the 1.08 mark. Trump himself was again quoted on similar lines, saying yesterday China and Japan “play the devaluation market”, with the comments collectively continuing to sustain the new administration’s frank tone offered on the topic of a stronger US dollar.
Equities stateside closed largely lower as participants continued digesting the feed of divisive recent moves for Trump, which combined with a spate of mixed corporate results and profit forecasts kept the mood generally more downbeat on the session than has been felt in recent weeks. Across the pond, European indices had earlier seemingly matched the tone.
This morning has seen UK manufacturing PMI results come in as expected with the survey edging down slightly from December’s reading. It represents a reasonably robust start to the year, but the report also suggested input price inflation reached a new survey record, reiterating the ongoing price pressure spurred by sterling’s significant slump last year.
Of note today we have the expected vote on the Article 50 bill, which is anticipated to pass following yesterday’s lengthy debates in Parliament. This afternoon across the pond US data arrives in the form the ADP non-farm employment, ISM manufacturing PMI and weekly crude oil inventory readings. Later still, the FOMC provide their latest rate decision, which is largely anticipated to see US monetary policy kept on hold and as always accompanying commentary on future trajectory examined with scrutiny.