USD retained its firmer tone throughout the day - ANZ

Analysts at ANZ offered a snapshot of the markets on Monday from the European and NY session.

Key Quotes:

"The USD retained its firmer tone throughout much of the European day as the market downplayed political rumblings in Washington to focus on the tax cuts working their way through Congress. A consensus view has formed that the tax cuts should boost GDP by about 0.3% next year."

"For an economy operating above trend and at full employment, that should underpin expectations of gradual and continuous Fed normalisation."

"The market is currently 48 bps priced for 2018. We continue to forecast 75 bps of hikes next year. The optimistic growth climate that the tax cuts play into was reflected in the stock market."

"The S&P500 rose 0.5% and Dow Jones 0.8%, but European bourses stole the show with the DAX +1.5%, CAC +1.4% and the FTSE 100 +0.5%. Bond yields rose with US 10-year pushing up to 2.39%. Oil saw some profit taking on concerns of rising shale oil production seeing WTI fall 1.3% to $57.6 pb."