Summary:

• European stock markets keep their moderate losses following a lacklustre session in Asia
• US dollar stays unchanged despite passage of the tax bill by the Senate, the Swedish krona gains in the aftermath of the Riksbank meeting
• Cryptocurrencies try to recover their losses made overnight

Moods across the European stock markets have been quite grim thus far as all the major indices remain in a retreat. Notice that passage of the US tax bill (possibly the most sweeping overhaul of the US tax code in more than three decades) has not helped improve sentiment. Let’s also add that now the bill must go back to the House where final approval is expected on Wednesday. If so, it should end up with a signature of President Trump to officially confirm all changes before Christmas. Opening of the European session was calm with majority of indices quoted a little bit higher but sellers have been trying to dominate the early trading. Investors in Europe may look ahead to Carney’s speech at the Parliament Hearing. Right now one can notice that the major indices are down ca. 0.3% except the FTSE100 (UK100) which is trading flat. On the other hand the Spanish IBEX (SPA35) is declining over 0.6% in anticipation of a local election in Catalonia scheduled for Thursday.

On the FX front we may notice that the US dollar has been going nowhere as the buck is trading flat against the euro. On the other hand the Swedish krona is worth attention as it’s the strongest currency in the G10 basket following the Riksbank meeting. First and foremost, the bank decided to lift inflation projections (CPIF – the official target) for this and the next years to 2% from 1.9% and 1.8% respectively. It means that the 2% target should be finally achieved allowing the bank to consider raising interest rates as soon as mid-2018. The Riksbank did not adjust the path of projected hikes though as the first increase is still foreshadowed approximately in 6 months.

There was a wide-spread sell-off across the major cryptocurrencies during the Asian session except Bitcoin Cash which gained momentum substantially. Declines came on the heels of the Coinbase’s announcement claiming that it’s rolling out support for Bitcoin Cash. Let’s remind that Coinbase is the leading platform for buying and selling Bitcoins in the US. The Bitcoin price (BTCUSD on xStation5) slumped to as low as $15,600 while Ethereum (ETHUSD), Litecoin (LTCUSD) and Ripple (XRPUSD) also saw quite severe slides. However, the above-mentioned digital currencies have been able to recoup their prior losses and right now all of them are trading higher on the day.

Looking forward there is a release on a change in US oil stocks which could spur higher volatility in crude prices. Moreover, the NZ dollar traders await another key data from the NZ economy – the Q3 GDP. There will be also a print on existing home sales from the US economy.