Weekly Key Trading News 27.02-03.03

Weekly Key Trading News 27.02-03.03

It’s been almost three weeks since President Donald Trump has mentioned his long-awaited tax plan, but key questions linger about what the tax reform will look like and when Republicans can pass it. He promised to present a “fantastic tax plan” within the next two to three weeks, so the deadline is coming. Therefore, the market will pay a close attention to Trump’s speech in Congress due Wednesday and it has a potential to become the most important event in the week ahead.

While the US indices have been rising steadily, the US dollar couldn’t find a direction despite the Fed’s minutes that seemed to open a way to a rate hike in March. If Trump fails to deliver, stocks and the US dollar could suffer. On the other hand, a reasonable plan could strengthen the bullish case for both stocks and the greenback.

Trump’s speech in Congress (Wednesday, 2:00 am GMT)

Donald Trump will appear in the Congress for the first time as the President of the United States. He will deliver remarks to a joint session of Congress. Details about this speech are scarce, but according to White House officials the message will be optimistic and uplifting. The speech is expected to emphasise what the administration has done to date and what can be done in Congress this year, including tax reforms. That is why it may be crucial for the US dollar and equities.

US data: Manufacturing ISM (Wednesday, 3:00pm), Non-Manufacturing ISM (Friday, 3:00pm)

The Fed’s March meeting is getting closer and closer and each data release is crucial. The most important figure will be the NFP report for February due 10th of March, but ISM indices should not be overlooked. Regional indices were solid, with the Philly Fed rising to the highest level since Reagan’s era but both PMIs showed an unexpected deceleration, a risk factor ahead of the ISMs. The non-manufacturing index will be more important as it may provide a clue ahead of the NFPs. A solid print should help the dollar as it will make a hike in March more likely.

Bank of Canada rate decision (Wednesday, 3:00pm GMT)

Although the Bank of Canada left rates unchanged when it met last time, it sent a dovish message. Governor Stephen Poloz insisted that rates may be cut again and that sent the CAD lower. While the data released since the last meeting was mixed the Bank is not expected to act. That is why the market will look into the statement to see whether a dovish tone is retained. If so, the CAD could shed its latest gains.

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