Economics taking a back seat - ANZ

Analysts at ANZ explained that Economic data has taken a bit of a back seat of late as a driver of market price action, and that was again evident overnight. 

Key Quotes:

"Despite US activity data continuing to roll-over (with the ‘soft’ survey data appearing to converge back to a more modest signal from ‘hard’ data as optimism about Trump’s economic policies wane), US Treasuries sold-off on comments from Treasury Secretary Mnuchin that the Treasury was “absolutely” considering issuing ultra-long bonds.

The bellwether 10-year yield rose 4bps and back over 2.30% – a level we see as reasonably key from a technical perspective. Not only that, but equity markets were flung about on comments from President Trump that he was considering breaking up the big banks and using a higher gasoline tax to pay for infrastructure spending.

Commerce Secretary Ross also noted that both Mexico and Canada are ready for NAFTA talks but that is being delayed by Congress (certainly the NZD and AUD appear to have been caught in the cross-fire of these recent NAFTA and US/Canadian trade headlines). Finally, White House National Economic Council Director Cohn noted that he believes they have the numbers to get the health care bill voted on again this week. Phew, it is little wonder markets appear to be lacking conviction right now."