The improved outlook surrounding U.S.-China trade relations continues to lift market optimism, including a rally in oil prices. The dollar dipped Wednesday morning as a risk-on mood continues and as we await the Federal Reserve meeting minutes later today. The pound steadied as the Brexit debate in U.K. parliament resumes.
Trade hopes lifting markets
The optimism as U.S. officials left Beijing Wednesday helped lift global equities, and now there’s a report that Trump is hoping a deal with China would help revive the stock markets.
According to a report, Trump is more eager to come to an agreement with China over trade, believing it could help the financial markets.
The recent trade hopes have helped the market mood and oil prices were able to rally. A barrel of West Texas Intermediate traded above $50 Wednesday morning and Brent crude jumped above $60. The production cuts by OPEC and the idea that the world’s two largest economies might get along seem to be helping.
The dollar took a dive this morning, falling to the euro and the pound after Atlanta Fed President Raphael Bostic suggested that there could be a rate hike or a rate cut at the next Fed meeting. The EUR/USD pair climbed from 1.147 to 1.151. Brexit jitters are holding the pound back from advancing too much against the dollar. The GBP/USD pair grew from 1.273 to 1.278.
Trump makes pitch for border wall
President Trump took his argument for a border wall to primetime last night in a televised address to the nation.
Trump labeled the border a humanitarian crisis, but stopped short of declaring it a national emergency. The address did little to change the risk-on mood.
We are now entering the 19th day of the government shutdown with no solution in sight.
Central bank day
The Bank of Canada is set to deliver its interest rate decision and monetary statement this morning.
The BoC is expected to hold rates steady at 1.75%, but we could see some comments in the statement that would move the Canadian dollar.
After the BoC, the Federal Reserve is set to release the minutes from its FOMC meeting in December, when the committee unanimously voted to raise rates. The minutes could give some insight into that decision.