Markets want to believe in president Trump. That's the clear message from last night's price action in stocks, bonds, and Forex.
Don't be fooled. The stock market recovered but many other markets are moving around.
Markets have opened in Asia this morning in very different mood to Friday's New York close. Stock futures are down, as is the US dollar. Gold is up and bonds are bid. What gives....
The failure to even get to a vote on the repeal of Obamacare overnight is a warning that the Trump trade could become a trump tantrum. We'll see...but in the meantime Sterling broke out and the Aussie dollar broke down.
It was a bad night for risk appetite as stocks fell and gold and the Japanese yen rallied. It's only the first fall of more than 1% in more than 100 days. But is it the start of something bigger.
The US dollar is losing ground across the board as evidenced by the continuing rally in the Aussie dollar, Mexican Peso, and Singapore dollar.
In a week where there are few fundamental catalysts many Forex pairs, and oil, are approaching critical junctures. Things could get very interesting as a result.
A bank of England surprise, a weaker dollar and the Saudis saying they might extend production cuts made for an interesting night.
Traders read the Fed as more dovish than they expected which hammered the US dollar and drove the Euro, Yen, and Aussie - among others - higher.
Politics played a big role last night in Forex moves while stocks dipped and oil had a wild ride...now for the Fed.