The stock market looks likely to hold the line as investors wait on President Trump’s speech before Congress .

Bond and currency markets have already adjusted for more moderate expectations on the timing and extent of the Trump Administration’s fiscal stimulus. Australian stock markets will probably be cautious about selling further prior to the speech given the adjustment that’s already occurred.

The US 10 year note chart, neatly hit trading range resistance on Friday. A move lower tonight would confirm the 5th rejection of this trading range boundary. Text book behaviour now would be for price to drop (yield to rise) with a break below support. However, a break above this resistance could see an ongoing price rally with yields potentially retreating to 2.15/2.05%

 As far as US tax policy is concerned, markets understand that it’s likely to be several months at least before an agreed position on the detail of tax reform can be achieved. Tomorrow's speech seems unlikely to provide much certainty on that front. However, traders may be looking for more detail on infrastructure and other spending initiatives. 

The major mining stocks finished above their lows yesterday after several days of concerted profit taking. Yesterday’s turnaround,  together with the higher spot iron ore price suggests the materials sector will steady today, helping the ASX 200 to stabilize above short term support near 5700 today

The $A may be sensitive to unexpected results in today’s current account data. The big turnaround in Australia’s trade performance together with low interest rates is expected to drive a major improvement in the current account which is an important consideration for currency valuations. Markets will also be sensitive to net export volume data which is anticipated to be a positive for tomorrow’s GDP figure. 

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