Once again geo-political factors and more specifically, political wrangling at the White House has hit the global markets. President Trump fired Secretary of State Rex Tillerson and is set to appoint CIA chief Mike Pompeo in his place. The Global equity markets have reacted with selling across the board and the US indices have finished the day well in the red. The currencies markets have reacted as most traders would expect with the usual flight to safety trades dominating. Chf and Jpy were particularly well bid and Gold came in much stronger with the dollar remaining on the back foot. This news overshadowed the earlier CPI data release which came out on expectation and led to a more dollar downside as it pulls back on Fed Hawks expectations of growing inflation.
Looking ahead to today and the market will continue, once again, to digest news out of Washington as the Asian session begins and it looks set to start on the back foot. We have Chinese Industrial production numbers due in the Asian session but it’s quiet again in terms of fundamental data releases in the London time zone. Once again we have tier 1 data releases due out in the US with both the PPI and Retail Sales numbers coming out at 11.30 pm Sydney time.