US equities continued to push higher on the back of positive corporate earnings and optimism over the upcoming announcement by the Trump administration regarding tax cuts, prompting the NASDAQ to make a new all-time high as we saw the index capture the 6000 mark. Asian equities followed suit with the ASX 200 gaining 0.8%, the Nikkei 225 was also supported by a weaker JPY which saw exporters climb to push the index into gains of 0.9%, while in China, the Hang Seng gained 0.6% and the Shanghai comp gained 0.4%. Equities will remain sensitive to today’s announcements, specifically regarding the tax reforms expected out of the US. Should we see beneficial cuts, equities will continue to climb, while a failure to live up to the markets expectations, will see the indexes take a dive as traders take profits and adjust their positions.
In FX, we saw risk on sentiment continue as safe havens were sold off in favor of more risky assets. The USDJPY managed to test the 111.50 resistance level, reversing all this month losses, while the EURUSD climbed on rumors that the expected Macron win in France will see the ECB take a more relaxed stance as risk of a Frexit diminishes.
In commodities, gold continued to be pressured with bears testing the 1260 support level as they continue to probe for the all-important 1250 support level. Should risk sentiment continue to improve, this might very well be the case. However, should we see a return of uncertainty to the markets, bulls will capture 1265 as they look to form a base for a possible attack on 1300. Crude oil could not hold onto gains above $50 per barrel and we are seeing subdued trading ahead of today’s US Crude Oil Inventory figures. A higher inventory build will likely see the price of crude drop further, while a lower build will see the commodity challenge the $50 mark and beyond.
Other news to look out for today are the Canadian Core Retail Sales m/m figure and the speech by the RBA Governor Lowe.