Article / 28 February 2017 at 8:00 GMT

Morning Markets: Strong US data ahead of Trump speech



  • Japan: Preliminary industrial production (published)
  • Australia: Balance of payments (published)
  • South Africa: Private credit (published)
  • South Africa: Money supply (published)
  • France: Provisional CPI (published)
  • France: Household consumption expenditure on manufactured goods (published)
  • Sweden: GDP (0830 GMT)
  • Italy: Provisional CPI (1000 GMT)
  • South Africa: Trade balance (1200 GMT)
  • US: GDP second estimate (1330 GMT)
  • US: S&P CoreLogic Case-Shiller Indices, including housing price index (1400 GMT)
  • US: ISM-Chicago business survey - Chicago PMI (1445 GMT)
  • US: Consumer confidence (1500 GMT)
  • US: API weekly statistical bulletin, incl. crude oil and gasoline stocks (2130 GMT)
  • New Zealand: Provisional overseas trade indices (2145 GMT)
  • Australia: PMI (2230 GMT)
  • Trump to speak to congress (Wednesday 0200 GMT)
US president Donald Trump's speech to congress later today (0200 GMT on Wednesday) will surely be the most watched event of the day. Markets are eager to hear more about his tax policy, which will likely also affect trade and could have an impact on corporations' profitability and the dollar. Ahead of this, Trump won a little victory as his candidate for the post of trade minister billionaire investor Wilbur Ross confirmed with little opposition, attracting even votes by several democrats.

Ahead of this important appearance lies a busy day for US economic reports, including revised GDP numbers for the fourth quarter of 2016. We’ll also see new house-price data for December (via the S&P Corelogic Case-Shiller Housing Price Index) and the first look at the Conference Board’s US Consumer Confidence Index for February.

The second estimate of US growth in last year’s fourth quarter is expected to tick higher in today’s update. If that turns out to be accurate, a firmer increase will boost confidence that output will accelerate in this year’s first quarter.

When it comes to housing prices,’s consensus forecast calls for a slightly faster year-over-year change at 5.4%, or just slightly above the average reading over the previous 12 months. It’s unclear how much of a role housing prices will play in setting monetary policy. But with inflation showing signs of ticking higher, firmer real estate prices may resonate a bit more than usual ahead of the Federal Reserve policy meeting next month. 

The mood on main street has rebounded since Donald Trump’s election, as today’s monthly report on the Conference Board’s Consumer Confidence Index is expected to remind us. Granted, economists are looking for a fractional retreat in CCI in February.’s consensus forecast sees the index slipping to 111.0 from 111.8 previously. But that still leaves CCI close to December's 15-year high.

Market signals

Asian session

  • A positive lead from Wall St gave sentiment a lift in Asia
  • Markets will closely watch Trump's speech to Congress later today
  • His speech may offer clues on plans to lift GDP growth
  • Trump plans to splash out another $54bn on defence, but make deep cuts elsewhere
  • Nikkei 225 rebounded strongly from Monday's tumble, up 0.70% in late morning trade
  • Samsung's Jay Y. Lee faces indictment, leaving the electronics giant without a leader
  • Commodity prices have rebounded, with iron ore, nickel and copper making gains
  • Australian fall in business lending to blame for slowing credit growth in January
  • Australia's current account deficit has narrowed sharply to $3.85bn in December quarter
  • Robust gains for the big four banks buoyed Australia's benchmark S&P/ASX200

Forex ahead

  • The USD was little changed at 112.660 yen after rising 0.7% overnight
  • USD slipped against the yuan; it was worth 6.8612 yuan at 0133 GMT
  • AUD is treading water before Trump's speech. It was 0.7685 against USD at 0550GMT 
  • Wednesday's Aussie GDP numbers may impact AUDUSD

From the Floor

Rate hikes. “We need to see a repeat of Kaplan’s aggression from Yellen on Friday in order to believe there’ll be a March rate hike, but May is looking more and more likely,” says Boye.

Trump’s speech. “Markets are saying this could be make or break; not for Trump, but for the markets,” says Hansen.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

US housing costs play an uncertain role in Fed monetary policy decisions, but firmer home prices may resonate more than usual given signs of higher inflation, says James Picerno

AUD rally threat
AUDUSD has been unable to sustain any break above 0.77, and Australian GDP data could decide if its two-month long rally will last, says the team at Saxo Capital Markets Australia.

Trump hint
The US president has promised his address to Congress will include an announcement on infrastructure spending, writes the Saxo APAC Sales Trading Team.

Fed watch
The market-implied probability of a March US interest-rate hike rose last week to about 40%, but the sweet spot for a Fed rise is still May or June, says Kay Van-Petersen in a video update.

US Capitol building

 Financial markets keenly await US president Donald Trump's speech to a joint 
session of Congress on Tuesday. Photo: Shutterstock

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