There’s no major news on the schedule for overnight. New Zealand credit card spending is widely watched as an indicator of consumer demand, but economists don’t forecast it and it rarely moves the market significantly. In the absence of any major economic data, news from Washington will no doubt continue to roil the market.
I personally think that the problems facing the Administration will focus minds in the Republican Party and get Congress working harder towards some concrete accomplishments, and in the Republican context that usually means tax cuts. So ultimately it could prove positive for US stocks and the dollar should recover. Otherwise, more investigations, more delays in appointing officials, more uncertainty…it could get even uglier.
The European day starts off with German PPI, which also tends not to affect the market significantly. (By “significantly,” I use a cut-off of a move of ±0.1% in the relevant currency pair within 30 minutes of the release of the indicator. Since usually the market absorbs news quickly, any longer than that and the move might be due to other news or events occurring afterwards.)
Iran holds its presidential election today. While this election obviously hasn’t engendered the kind of interest that the French election did, it’s significant for global markets because of Iran’s oil production, which has almost doubled in the last few years, and its refusal to participate in OPEC oil restraint programs (although its production does seem to have peaked in February, in line with other producers). The election is widely seen as a referendum on the incumbent President, Hassan Rouhani, who agreed to limits on Iran’s nuclear program in exchange for sanctions being lifted. If he loses, Iran might try less to reintegrate into the world economy and become more confrontational. That could cause them to increase oil production at the expense of their OPEC colleagues, thereby pushing down oil prices.