SocGen's Global FX supremo Kit Juckes on why we should forget the Trump trade
Are markets concentrating too much on the Trump trade? SocGen's Kit Juckes thinks so. In his FX Daily, he laments the lack of follow through today from USDJPY breaking through the lower end of its range, and the failure of EURUSD to cement a 1.08 push.
He explains;
"All eyes are on the health care Bill which will be debated in the House of Representatives later today. Conventional wisdom is that President Trump hasn't secured the votes necessary for passage of the bill and the market take on that is that it exposes the Trump rally's shaky foundations."
"I think FX folk need to respect the break-out from recent ranges by the dollar and sit back. if the bond market rally ends here and we build a base for a new push to higher yields, the dollar rally can resume. But we need to get away from concerns about whether Donald Trump can deliver his programme and back to the underlying economic data. It could be a range bound day all round."
The Trump vote tonight is the market's main focus, and that focus is justified as this is the first real test for Trump and his policies. The sad thing is that we're trading that fact more than what the actual policy means for Americans but that's markets for you.
So far there's no definitive time for the vote but most news sources are saying that it won't come until the late afternoon or early evening. The session for it will kick off at 10 am ET (14.00 GMT)
