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February 2017

US President Trump to address congress later this evening

Published: Tuesday 28 February 2017

  • ‚ÄčUS President Trump to address congress later this evening
  • Australia reported its lowest current account deficit for 15 years 
By William Busby
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Monday offered traders an opportunity to warm up for the heavy event risk facing them as the week progresses. Focus will now turn to the US President's address later this evening, before a joint session of congress. More details on his economic plans are slowly being released. In particular, the intended uptick in defense spending has been set at $54Billion (0.3% of GDP) which is to be offset by cuts elsewhere. No details have been released on infrastructure except for President Trump stating that he "would spend big". More detail is needed in order to finally nail down the fiscal stance of the overall package. Traders will be hoping for some clarity this evening and the speech will be watched very closely indeed. For now, an interest rate hike in March still has a low probability, as the Federal Reserve is likely to hold off raising rates until the fiscal policy is much clearer.

There is plenty of data today, with the main figures centering around the US. We have US Gross Domestic Product (GDP) figures for the fourth quarter to be released, along with Trade Balance figures and Consumer Confidence all this afternoon. Attention will then turn to the main event, as President Trump speaks to both houses of Congress.

Australia reported its lowest current account deficit for 15 years, as it was reported that the deficit fell by A$3.9 billion in the fourth quarter. The improvement was driven by higher commodity prices, particularly coal and iron ore. Iron ore prices have risen over 70% over the last five months, which would suggest that the improvement may continue. The Australian dollar firmed on the news, but is now looking a little overstretched. Data will need to remain robust, otherwise there is a strong risk of a correction, with the currency moving in the opposite direction.
 

Missing dog

 
An old farmer is inconsolable after his dog goes missing. He takes out an ad in the newspaper, but two weeks later, there’s still no sign of his beloved companion. 

“What did you write in the ad?” his wife asks. 

"Here, boy,” he replies.

 

Today's Major Economic Releases
 

Market
BST
Data/Event
Previous
Expected
CAD 13:30 Canada: Raw Materials Price Index 6.5% 1.3%
USD 13:30 US: Prelim Gross Domestic Product 1.9% 2.1%
USD 13:30 US: Goods Trade Balance -64.4b -66.0b
USD 13:30 US: Prelim Gross Domestic Product Price Index 2.1% 2.1%
USD 13:30 US: Prelim Wholesales Inventories 1.0% 0.5%
USD 15:00 US: Conference Board Consumer Confidence 111.8 111.3

For more information, infographics and the latest currency insights, visit www.halofinancial.com/blog
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