The Dollar has been made great again

15 November, 2016

The Dollar index consolidates near a 100 level.  The main driver of the US equities is the rate hike hope that just climbed to over 90%, as Trump pledges to revitalise economy with an extensive fiscal stimulus. Investors drop the bonds and emerging markets, as they are moving into the US assets whole anticipating strong growth in the economy and the inflation pickup under Trumps presidency.  Industrial metals surged, as the hope for a pickup in demand grew on Trumps promises. Copper rose 11% last week while iron ore rose to a two-year high.

The emerging markets equities extend declines. Starting off with Russia as the RTS drops by -0.59%, on the concerns of Trump breaking the trading agreements with Latin America countries the Brazil Bovespa dropped by -3.30%, and Indian Nifty 50 falls 2.69%. 

The Chinese manufacturing and retail sales data came in slightly worse than the projections accounted for. On the other hand, the Chinese stock indices rose, reflecting the successful attempts of the government to deflate the credit bubble in the housing market, ShComp +0.45%.

The Japan GDP beats expectations by 2.2% against the expected 0.8%, improving the inflation forecast, thus giving more time for the BoJ to get on the pace of the current stimulus. The Japanese Industrial productions are higher than in the previous month, 1.5% vs. 0.9% previously. The Japanese Yen fell another 1% against the US Dollar, while the British Pound tumbled to 0.7%. The EUR/USD falls 0.87% to 1.0760, as Nikkei 225 extends advances due to the weakened Yen, Nikkei 225 +1.71%.

Australian Dollar is on US Dollars heels, as the pair holds on to the Fridays close thanks to the pickup in the commodity market, thus fuelling the growth of the Australian Dollar.
The European and UK equities advance, as DAX gains 0.85%, and the UK 100 index adds another 1.16%.

Crude oil extended decline as investors are desperately seeking catalysts for growth within the rise of the Dollar, WTI -0.38%, Brent -0.48%.

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