Market wrap: President Trump’s personal lawyer raided by the FBI - Westpac

Analysts at Westpac explained that having fallen 2 days and risen 3 days last week, US equities seemed to again price in an easing of trade tensions Monday, the S&P 500 rising as much as 1.8%. But gains then started to fade, with a late hit from headlines that President Trump’s personal lawyer had been raided by the FBI.

Key Quotes:

"EUR/USD rose from 1.2260 to 1.2330, with GBP/USD also up 0.3% in a broad US dollar move. USD/JPY tested 107.20 then rolled over to 106.62 on the FBI headlines.

AUD/USD was lively, falling as far 0.7652 in London then rising to 0.7711 on the better risk mood plus weaker USD. Outperformer NZD rose from 0.7280 to 0.7324 – the highest since 15 March. AUD/NZD fell to 1.0505 – a low since July 2017.

USD/CAD slipped about 0.6% to lows under 1.2700 as White House adviser Kudlow said good progress was being made on NAFTA.

The Congressional Budget Office released its latest fiscal projections, in which “budget deficits continue increasing after 2018, rising from 4.2 percent of GDP this year to 5.1 percent in 2022 ... That percentage has been exceeded in only five years since 1946; four of those years followed the deep 2007–2009 recession.”"