US Dollar tells a tale of two Greenback's with tariff threats choke holding markets

LONDON (November 26) The US Dollar (USD) is steamrolling markets and investors on Tuesday after President-elect Donald Trump communicated on his social media channel that his government will issue an additional 25% tariff on imports from Canada and Mexico, with an additional 10% to the 60% already announced during his election campaign on Chinese goods. Markets are not doing well with this communication, as equities are printing red numbers across the board and the globe while US bond prices are dropping (yields are soaring). 

The US economic calendar will show some housing data on Tuesday. With the Housing Price Index for September and the New Home Sales data for October, markets will be able to see if the housing market in the US is cooling down as the last piece that was driving inflation. At the end of the day, the Federal Reserve (Fed) publishes the Minutes of its November 7 meeting.

Daily digest market movers: FOMC Minutes to be more important

• At 14:00 GMT, the monthly Housing Price Index for September is due. The number is expected to come in at 0.3%, the same as the August reading.
• At 15:00 GMT, the November Conference Board Consumer Confidence is due to come out, though no forecast is available with the previous reading at 108.70.
• At 15:00 GMT, New Home Sales data for October is expected to show a slide to 0.73 million units against 0.738 million previously. 
• The Richmond Fed Manufacturing Index for November will be released at 15:00 GMT as well. The expectation is for a contraction of -10, less severe than the -14 previously. 
• At 19:00 GMT, traders can look for clues about the December rate cut expectations in the release of the Fed’s Federal Open Market Committee (FOMC) Minutes for the November meeting.
• Equities are depressed across the board, with losses across Japan, China, Europe. Most losses remain contained to less than 1% on average. US equity futures are breaking the negative tone and are positive for this Tuesday.
• The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 59.6%. A 40.4% chance is for rates to remain unchanged. 
• The US 10-year benchmark rate trades at 4.29%, substantially lower from the high printed two weeks ago of 4.50% on November 15.

FXStreet