Strong factory data and the prospect for American tax cuts boosted confidence in the global economy, lifting the dollar and emboldening equity bulls who drove U.S. equities to fresh record highs and set up Asian markets for a higher start.
The Bloomberg dollar index was near strongest since mid-August, and the S&P 500 Index closed at an all-time high after data showed U.S. manufacturing expanded at the fastest pace in 13 years. That comes on the back of an unexpectedly strong factory gauge out of China over the weekend and the Bank of Japan’s quarterly Tankan survey showed the country’s big manufacturers are the most confident in a decade.
The greenback and equities are turning out winners as money managers consider the implications of Congress passing a pro-growth tax plan and ongoing speculation that President Donald Trump will opt for a Federal Reserve boss who might pursue more aggressive policy tightening. Investors are also watching developments in Las Vegas, where more than 50 people have died in the deadliest shooting in modern U.S. history.
The run-up in the dollar is prompting some speculators to build up positions that become profitable if the U.S. currency weakens.
Elsewhere, the pound tumbled on concerns about the stability of Prime Minister Theresa May's government and the British manufacturing data missed estimates.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
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