Is the Trump trade really back on?

Although it was a positive night for the DOW and S&P 500, both failed to trade above the highs before the Federal Open Market Committee (FOMC) rate decision.

New York
Source: Bloomberg

The Trump trade is back on, however is lacking momentum to reach the nominal target of 20,000.

The DOW led by the financials on expected margin improvements with still positive data flowing saw the core CPI up 0.2% for November. This is what the global economies are looking for: real price growth. This has seen energy prices rise, and reaffirms the FOMC rate decision and the forward dot plot.
2017 could be described as the year the central bankers start to move off stage.

The US dollar continues to crush everything in its path. The benchmark dollar index has traded clear of the 1.02 resistance, making a high overnight at 1.0356 the highest since 2002 - a continuation of the current bullish trend. Our technical price target for the USD basket DXY now sits at 1.077, inferring the pressure will remain on the EUR/USD pair. Last night it traded below the key 1.05 level and briefly through 1.04, making a low at 1.0366 and finding support back over the key 1.04 level.

USD/JPY traded at 118.11. The weakening yen will lift the Nikkei again as Japanese goods and services appear cheaper on an exchange rate basis.

Gold marched towards the technical price target of $1100oz last night, and traded below $1130 - a solid $30 move lower from the time of the US rate decision. Australian gold miners are expected to remain under pressure as the spot price looks for price support. The AUD price of gold also makes a new 2016 low overnight at $1536oz, adding pressure to the current equity price levels. Still, the fine balance of supply and available storage levels pushed oil back to the key $50bl level.

The BHP ADR shows the stock opening down at $25.06 with the CBA ADR showing a slightly higher open at $80.99. For local markets, overnight index futures suggest an eight point move higher at open to 5546 points. Our investors will be looking for direction after yesterday’s soft employment numbers. The AUD/USD this morning is trading at 0.7358 and acts as the only offer of support for resources in today’s market.

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