US House passes tax reform bill

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Forex news for New York trading on November 16, 2017.

A snapshot of other markets near the end of day shows:

  • Spot gold of $.38 or 0.03% at $1278.50
  • WTI crude oil futures down $.14 or -0.25% at $55.19
  • US interest rates  are higher.  Two-year 1.708%, +2.5 basis points.  Five-year 2.07%, +3.8 basis points.  10 year  2.37%, +5.1 basis points.  Thirty-year  2.82%,, +6 basis points
  • US stocks surged on the back of higher earnings from Walmart and Cisco and the passing of the house tax reform bill.  S&P up 0.82%.  NASDAQ up 1.3%.  Dow industrial average up 0.8%.

The big news today (although expected) was the House of Representative passing of their tax reform bill.  The Senate is next. They will have a tougher time as the margin of for victory is only 2 swing votes (assuming all the Democrats vote “nay”).  The Senate vote will be taken after Thanksgiving.  After that (and assuming passage from the Senate), the two bills go to committee before a final vote.  It is hoped that the final bill can be signed into law by the President before Christmas.  That is the best case scenario. The worst case scenario is it does not get to committee because of opposition in the Senate. Time will tell, but today was a good day for Rep Brady and House Speaker Ryan and the rest of the GOP members.

On the economic front, the Initial jobless claims were higher than expectations at 249K versus 235K estimate.  The data is still being impacted by hurricanes.  

The Philadelphia Fed business outlook index was lower than expectations of 22.7 versus 24.6.  US import price index rose by a smaller than expected 0.2% versus 0.4%. Finally industrial production capacity utilization were greater than expectations (IP rose 0.9% vs 0.5% estimate and Cap. Util. 77.0% vs 76.3%).  However, they were influenced also by the hurricane in a positive way (+0.6% for Industrial production).

The best data came out of Canada with Manufacturing sales coming in much better at +0.5% vs -0.5% estimate.  

The US news did not have that great an impact on the USD dollar in the NY session. Yes prices moved up and/or down, but apart from the USDCAD which extended its range by 25 pips vs the NY opening (as a result of the much better Manufacturing sales data), and the USDCHF which extended by 10 pips (the CHF pairs are trading at extremes into the close), the trading stayed within the high low range set by Asian and London trading for the rest of the major currency pairs.  In fact all the major pairs against the USD, and major crosses failed to reach their 22-day averages (see lower chart below).

The greenback was mixed, with gains vs the EUR, JPY, JPY and NZD and losses against the GBP, and CAD. It was unchanged vs. the AUD.

For the day the strongest currency was the GBP while the weakest was the CHF.

Toward, the close I did outline the technicals for some of the major pairs including the USDCAD, USDJPY, EURUSD and GBPUSD. You can find my thoughts for those pairs, but CLICKING HERE.

For those traders in the Far East who will call it a day at they end of your shift, let me wish you all a great and safe weekend.  And for all traders, good fortune with your trading.  

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