The risk environment is looking weak ahead of the US cash open

• After Trump's speech on Tuesday equities markets have remained unimpressed.
• Gold, JPY and CHF have been outperforming while the S&P futures contract trades 0.28% lower.

The markets waited in anticipation for US President Donald Trump's speech at the New York Economic Club on Tuesday. There were also reports that he would comment on the "phase one" trade deal with China.

These turned out to be false and the markets went into risk-off mode after the event. It seems his attention had been turned to bashing current Fed Chair Jerome Powell, He said in a familiar fashion that stock markets would be higher if it wasn't for Powell and that the Fed are making the US uncompetitive.

Incidentally, Powell is testifying before the Senate today. He is expected to tow the current Fed party line that they (the Fed) are fine where they are and need to pause to asses how their recent moves have affected the markets. The indices want the Fed to ease, so this might not go down well as it means they are less accommodative.

This could mean that equities come off once again. Overnight the Nikkei 225 fell 0.85% and the FTSE 100 (-0.34%) and DAX (-0.52%) are both lower in Europe.

As always there is a small chance we could get a surprise but the way the market is headed at the moment, equities are pricing in more bearishness for this session.