Trumps Speech & Crude Oil Inventories

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Trumps Speech & Crude Oil Inventories

一月 11, 2017Daily BriefingBy sharptrader

Donald Trump is due to hold a press conference in New York today which could cause market turbulence. Investors will be paying close attention to the speech for any clues on his proposed policy plans. Expectations that Trump’s promised fiscal stimulus will help boost the US economy are rife. The US market could rally if the president-elect promises to cut taxes and increase expenditure. The market holds its breath this morning in anticipation.

Crude oil inventories will be announced today. Forecasts suggest that the change in the number of barrels produced will be +0.9M.

Currencies

The US dollar stays stagnant – Stuck in a sideways trend, the greenback is struggling to find meaningful force. This trend represents a recent slow-down of US Treasury 2-year and 10-year yields causing investors to retreat from their bullish bets.

The strong US job and wage data for December indicate that the FED may not increase interest rates three times in 2017. Trump’s speech later today could cause movements in the currency.

The Yen had an underwhelming performance overnight – Net-short positions are at the highest point since August 2015.

The Bank of Japan will likely keep 10-year yield around zero. The uncertainty around Donald Trump’s pending policy reform has weakened the Yen by about 12% since his election.

Commodities

Crude Oil ahead of today’s inventory announcement – The commodity has fallen sharply this week despite OPEC’s production cuts. However, there are doubts that OPEC members will stick to their proposed production cuts in the long run. OPEC’s second largest producer, Iraq, have said that they will increase its production to record highs in February of this year.

Additionally, investors know that higher oil prices could lure other oil producers into the market, increasing supply and eroding efforts made by OPEC to increase the price of oil.

Gold rallies on safe-haven demand – Geopolitical uncertainty has caused investors to seek refuge in the commodity. Trumponomics, a hard Brexit and the impending French and German elections are just some of the uncertainties on the agenda for 2017.

Gold is up 0.30% this morning, trading at 1190.50 per ounce.

Market Watchlist

Gasoline, Brent Oil, heating oil and are the energies to watch. Crude oil inventories are due to be released later today. Historically, the price of crude has broadly dictated the energies.