Marco Rubio confirms he will support tax bill

Soon, everyone will be a bitcoin miner If you want shares of your company to go higher in December 2017, all you have to do is say the magic word: Bitcoin. You probably haven't heard of Rich Cigars Inc. It's a lightly TOC-traded company that was basically a worthless Florida company that would "distribute, brand and market tobacco products."

The market is left confused by Poloz USD/CAD plunged to 1.2710 from 1.2860 yesterday on from BOC Governor Poloz but 24 hours later, it's completely recovered.

Below the 1.1763 area The 1.1763 area was a low earlier today. The level was a swing low from Monday and Tuesday. It was near a swing high from Wednesday (see red numbered circles).  

Weekly oil and gas drilling data from Baker Hughes - Prior was 751 - Natural gas 183 vs 180 prior - Total 930 vs 931

A look back at this year Credit Agricole Research discusses the main drivers of the G10 FX markets in 2017 and how they contributed to a challenging environment for traders when it comes to following a dominant FX strategy through the year. 

Big week for both The Australian and New Zealand dollars have been easily the best performers this week with both gaining in four of five days. Moves versus USD this week:

How high can the euro go next year? ING FX Strategy Research discusses EUR/USD outlook for the coming year following today's ECB policy decision. "Overall, today's ECB meeting was one big non-event in terms of the spill-overs to the EUR. While the ECB staff revised both its GDP and CPI forecasts higher, one can argue that the change to the CPI forecast is somewhat conservative versus market expectations. For example, our economists are looking at CPI projections at 1.5%YoY vs 1.4% presented by the ECB for 2018. Hence, the kneejerk reaction in EUR/USD lower.

All indices are at record breaking levels The Nasdaq composite has been more of a laggard of late. This week, the S&P and Dow were making new session highs but the Nasdaq did not.  Some of the delay was due to the last corrective move which saw rotation out of the tech and into the bigger cap stocks. 

Closing changes for the main European bourses - UK FTSE +0.4% - French CAC -0.1% - German DAX +0.3% - Spain IBEX -0.4% - Italy MIB -0.8% On the week: - UK FTSE +1.1% It was a tough week in Italy because of reports that the election will take place in early March.

High estimate compared to Atlanta Fed The NY Fed's Nowcast tracker of  GDP growth now sees 4Q growth at 4.0%. That is up from 3.9% last week. The contributors over the last week include:

The trend down continues but momentum fading Earlier I spoke about the 1.3322 level. That was a trend line on the hourly chart ().  That level started to hold in the NY session, and there was a modest consolidation/rebound. The price moved to a high of 1.3339 - staying below the 1.3349-54 level outlined as a resistance target.  The trend sellers stayed in control and a new low was made down at 1.33045.

Rubio is on board The latest development in the tax debate is Marco Rubio getting on board after a the refundable child tax credit. That's given a lift to the US dollar and stock markets. Mike Lee also wanted the credit so assume he's on board as well.

Tests 38.2% and the underside of broken trend line The USDJPY has moved higher on the back of Rep Mario Rubio, saying he will now vote "Yes" on the tax bill.  

USD/CAD higher on the day USD/CAD traders have been asking the same question to BOC Governor Poloz: What do you mean? That's after he talked yesterday about 'caution', something the BOC said it will take before removing stimulus and something he reiterated yesterday. But at the same time he said 'caution' didn't necessarily mean staying on the sidelines.

Statement from Evans Chicago Fed President Charles Evans voted against the latest rate hike, in a move that was somewhat of a surprise. He his rational today.

EURGBP corrects The EURUSD has moved back lower in an up and down day. The price closed at 1.1775.  We currently trade at 1.1773.    The fall lower has taken the price back below the 200 and 100 hour MAs (green and blue lines in the chart above). Earlier in the London morning session, the pair based at the 100 hour MA (see blue line) before running higher.  

S&P 500 up 13 points at the open You can't keep the stock market down. Yesterday's worries about the tax bill are fading and yesterday's 10 point loss in the S&P 500 has been erased. The index is up 13 points to 2665, in part because of strong earnings.

Resistance at 1.3349-1.3354. A move below the 1.3322 should be more bearish. The GBPUSD tumbled below an old trend line at 1.3406, then the 200 hour MA, 100 bar MA on the 4-hour (both at 1.3394) and the 100 hour MA (at 1.33763). The 38.2% of the move up from November 3 low was also cracked again at 1.3354. That is close risk now for the shorts in trading today.

Some platitudes from May - We will be beginning talks about future EU relationship straight away - Still a lot more to do - EU and UK have shown what perseverance can achieve Cable is not in a good mood today.

November industrial production data - Prior was +0.9% - Manufacturing production +0.2% vs +0.3% expected - Prior was +1.3% (revised to +1.4%) - Capacity utilization 77.1% vs 77.2% exp

Year-end funding squeeze is on The law of unintended consequences is operating in full swing this year. Changes in banking rules made it tougher for banks to operate in the derivatives market and as a result, a dollar squeeze is underway.

Series of MAs taken out on the surge The EURGBP has taken off to the upside. Merkel said the 2nd phase of the Brexit talks will be harder.   Technically, the price surged above a number of moving averages and retracement levels.

Canadian October manufacturing sales data - Prior was +0.5% (revised to +0.4%) - New orders +5.3% vs -1.8% prior - Unfilled orders +2.4% - Inventories +1.6%

December 2017 New York Fed Empire manufacturing A slip in the index for December (and the components), but still near higher levels (see chart above). From the NY Fed: