It is a typically quiet Monday, with little for traders to get their teeth into, so consequently there is a great deal of speculation over a few items:
1. President Trump is making his first address to the U.S. Congress this Tuesday, and he is expected to finally begin outlining his administration’s plans for tax reform, and it is expected to be a sweeping plan of dramatic change. Much of the congestion in the market is due to the anticipation of this event, but unless there is a leak (unlikely), we will have no way of knowing what he will say until he says it.
2. OPEC have begun to implement a squeeze on oil supplies, and we have a gently rising oil market in USD terms (the usual measurement of the price of oil) which should be boosted by this. There are not many trends going on right now so traders are thinking that oil might be due a sizeable upwards move.
3. The EUR looks quite weak, as polls are again showing the Dutch Freedom Party as on course to emerge as the largest single party in the Netherlands general election which will take place on 15thMarch.
Obviously the first item is more important than the second, as it could create a large USD move which could blow away anything oil is doing, especially if the move is a rise in the relative value of the greenback.
Turning to hard news now – or at least harder – the main item is increased speculation that Scotland will hold a new referendum on independence from the U.K. as the country makes progress towards exiting the European Union – something bitterly opposed by the Scottish consensus. There is also a report that as Article 50 is triggered next month (March), it will be announced on the same day that any E.U. national arriving in the U.K. from then on will not have right of residence, i.e. the U.K.’s acceptance of E.U. free movement will end on that day.
