Summary:
- European stocks follow upbeat sentiment form Asia, the US Congress could pass the final tax bill as soon as Tuesday
- US dollar weakens against almost all G10 currencies
- Bitcoin (BTCUSD on xStation5) is traded around $19k, CME launches Bitcoin futures
European stocks surged this morning following the upbeat sentiment from Asia. It seems that the reason behind the rally is approaching US tax reform. Congress could implement it as soon as Tuesday. Despite these positive signals, the US dollar weakened against almost all of G10 currencies. However, the scale of the moves wasn’t large. Further on, Bitcoin (BTCUSD) reached $19k mark after CME introduced Bitcoin futures.
Global stocks began a new trading week with optimism as the US Congress is expected to pass the long-awaited tax bill this week. Moreover, some investors could look for a start of Santa Claus rally. Note also that there is a regional election in Catalonia and this could put once again the Spanish IBEX (SPA35) in the limelight. As of time of writing German DAX (DE30) is a top-mover rising by almost 1.4%, French CAC40 (FRA40) is up 1.20% and the UK FTSE100 (UK100) is hovering around 0.5% mark. Spanish Ibex (SPA35) is increasing by 0.63%.
A week after a launch of Bitcoin futures at CBOE the same scenario took place at CME on Sunday, the largest futures exchange. However, as opposed to a rise in Bitcoin price after the start of trading at CBOE there was just a mediocre jump this time round after the price retreated. The futures opened at $20,650 and it rose slightly but it fell back to $18,760 about four hours of trading.
As far as the Australian dollar is concerned, we got a mid-year fiscal and economic update which showed a lower down previously deficit (23.6 billion AUD against 29.4 billion AUD seen in May). Nevertheless, the forecast for GDP growth in 2017/2018 was slashed from 2.75% to 2.5%. All in all the AUD has benefited from the lower projected deficit as well as the better performance of its major peer from New Zealand. As of time of writing AUD is gaining 0.20% and NZD 0.16% against the USD.
The latest report from the CFTC illustrated that the net speculative positioning in gold and silver tumbled in the week ending 12 December. As far as gold is concerned the net positioning slid from 173k to 107k while the net positioning in silver plunged from 31.4k to as low as 9.9k – the lowest point since July 2017. The US tax bill expectations could have been among reasons why investors decided to pull out their money from longs in precious metals.
Monday calendar is calm as usual but it is quite likely that the whole week will be very interesting as the Tax Plan in the US is on the final straight. On top of that Wednesday through Friday is quite busy in terms of macroeconomic releases and Swedish Riksbank will take its decision on rates.