US equity markets see strength

which include plans for deregulation and infrastructure spending.

A whopping US$ 63 billion poured from bonds into USUS$ stock funds since President Trump won the election, according to a report from Bank of America Merrill Lynch. Bonds fell sharply and the dollar rallied against most other currencies.

With the unemployment rate is within range of full employment and inflation is moving back toward the Fed’s preferred 2 per cent target, the central bank hiked the federal funds rate by one-quarter percentage point, as was widely expected in the financial markets. The dot plot now calls for three quarter-point increases in 2017, up from two earlier, followed by three more in 2018 and three more in 2019.

A higher interest rates and lower regulation pushed financials stocks higher, which boost the net margins for the US banks. Oil prices weakened due to the stronger dollar.

A strong dollar made greenbackdenominated commodities including oil more expensive.

The oil market is still responding to the impact of US shale oil production. That reduced oil prices 25 per cent in 2014 and 2015.

We expect the markets continue to trade in a relatively tight range amid thinning volumes ahead of the December holidays. We could see a clean trend after Donald Trump’s Inauguration on January 20.