• US dollar pares some of its gains after Trump’s speech
  • Sentiment on European stock markets remain slightly positive
  • Investor still awaits inflation figures form Germany

The US dollar saw a bit of profit taking this morning. Nevertheless, USD still looks relatively solid, underpinned by optimism over the latest US data and President Donald Trump’s tax-cut plan as well as growing expectations of a Fed’s rate hike in December. The majority of European indices were slightly in the green and investors await inflation figures form Germany.

Trump presented a framework of his tax plan yesterday. The US president advertises his proposals as a major tax relief that will turbocharge the US economy. However, there are many issues to be resolved and it’s difficult to identify the schedule for the draft. Thus, investors should remain calm, although this tax push could be US dollar friendly. As of time of writing, the USD is giving up some of gains against most of its peers. EURUSD is especially interesting as the pair rebounded from an important support and investors now awaits inflation data from Germany.

A scorecard of the Asian session shows that the Hang Seng (HKComp) proved to be the worst index losing as much as 1.5%. Unlike its offshore peer, the Shanghai Composite (CHNComp) slid just 0.2% while the Australian S&P/ASX 200 (AUS200) ticked up 0.1% and the Japanese NIKKEI (JAP225) grew 0.5%. In Europe the DE30 is moving up 0.35%, the French CAC40 (FRA40) is trading flat, the EuroStoxx50 is upping 0.14% while the FTSE100 (UK100) is trading lower 0.2%.

The RBNZ decision was the last central bank meeting this month. Unlike the Fed that was a turning point for the US dollar the RBNZ offered little to support the kiwi that has been already struggling under a burden of inconclusive elections (that occurred last Saturday). 

 Inflation numbers are always worth looking at especially when the ECB is in a position to begin dialing back its monthly asset purchases. Higher readings ought to convince the Governing Council that it’s right to do so. German inflation for September (1:00 pm BST) is anticipated to come in at 1.8% yoy (HICP).