A stream of economic data will make its way through the financial markets on Wednesday, but it likely won’t be enough to generate significant volatility on its own. Instead, investors will be considering the latest battle on Capitol Hill over President Trump’s proposed tax reforms.
The Trump regime is aiming to revamp the nation’s tax code before year’s end, a feat that will prove exceedingly difficult as Democrats and even members of his own party oppose key provisions. Chief among them are stipulations over state and local tax deductions.
On Tuesday, the Joint Committee on Taxation concluded that tax cuts for lower and middle-income earners would gradually fade over the next decade.
On the economic calendar, France will release its latest trade figures at 07:45 GMT. About 15 minutes later, Spain will report on industrial output for the month of September.
Portugal is also slated to release its latest unemployment data sometime during the day.
Meanwhile, the European Central Bank (ECB) will be holding its non-monetary policy meeting on Wednesday. The ECB’s last policy meeting concluded with a reduction in the size of its monthly bond-buying program, but a likely extension of its duration. The euro declined sharply following the news.
Shifting gears to North America, Canada will issue its latest housing starts and building permits data at 13:15 and 13:30 GMT. Both reports are expected to show a decline in the monthly rate.
No major US reports are scheduled for Wednesday. The US Energy Information Administration (EIA) is expected to report on weekly crude inventories at 14:30 GMT. The weekly report is expected to show a drawdown of 2.8 million barrels in the latest period ended 3 November.
Earlier in the day, China reported its trade balance for the month of October. Beijing’s trade surplus rose to $38.2 billion in October from $28.61 billion the month before. Exports rose 6.9% annually during the month, while imports climbed by 15.9%.
EUR/USD
The euro fell back below 1.1600 on Wednesday, although losses were relatively contained as the US dollar failed to generate significant momentum. The EUR/USD exchange rate was last seen hovering just below 1.1600. The pair faces immediate support at 1.1575, followed by 1.1510. On the opposite side of the ledger, resistance is likely seen at 1.1630 and 1.1670.
USD/CAD
The Canadian dollar lost momentum on Tuesday following sizable gains at the start of the week. The USD/CAD was back to trading well below 1.2800 as markets anticipated upcoming Canadian data. Near-term support is located at 1.2714, which is the low from 6 November.
US OIL
After three consecutive gains, oil prices softened slightly on Tuesday. However, the uptrend remains firmly intact, with US crude now approaching $60 a barrel. Investors should pay close attention to the fundamental indicators for fresh trading catalysts.
