Trump tweets stock market will crash if he gets impeached while data shows strong US economy
Peter Compton " | September 26, 2019
The US dollar weakened after Trump’s tweet while the markets turn a wary eye to Washington and yet another testimonial in congress related to the Trump presidency. Second quarter economic data including a final reading for GDP came in as expected.
September 26, 2019
EUR/USD 1.096 GBP/USD 1.2356 USD/CAD 1.3244 AUD/USD 0.6776 USD/JPY 107.54 USD/CNH 7.1212 USD/ILS 3.5103 USD/MXN 19.5802 USD/CHF 0.9919 USD/INR 70.8812
The US Treasury announced an initial trade deal with Japan on agriculture, industrial goods and digital trade - they’re now working on phase two of the deal. US equities rallied yesterday as Trump stated that there’s a good chance of a trade deal with China and it could come “sooner than you think”. US GDP, wholesale inventories, initial jobless claims and continuing claims data is released this afternoon.GBP
The pound weakened vs. the US dollar as political drama continues in the UK. The deadline to leave the EU is still set for October 31. PM Johnson has said many times that he will not ask the EU for an extension. Nor is there much progress on negotiations with the EU on a plan for a “soft” Brexit. Johnson has challenged the opposition Labor party to trigger an election with a no-confidence vote, which Labor said will not happen without an extension of the Oct 31 deadline.EUR
The euro is flat this morning after monthly German consumer confidence data came in better than expected. The World Trade Organization has said it will allow the US to impose circa $8bn of tariffs on EU goods due to illegal state aid being provided to Airbus. The tariffs could be imposed as soon as October with retaliatory steps likely from the EU.CAD
The Canadian dollar is modestly stronger this morning despite a weaker oil price and a business barometer index for September coming in weaker than expected. The US-imposed sanctions on Chinese oil tankers for delivering Iranian oil. The move is not expected to lead to significant disruption in overall oil supplies.ASIA/PACIFIC
The Japanese yen strengthened on overall dollar weakness and due to quarter-end fund flows. End of September marks the half-year for the Japanese fiscal calendar.
Chinese authorities set the renminbi exchange rate at about the same level as yesterday. Beijing likely will hold the rate steady until after the October 1 celebrations for the 70th anniversary of the founding of the nation.