Markets more Edgy

2 November, 2016

On face value, the market is seeing this evening’s Fed decision as a non-event, the chance of an interest move being less than 20%. For next month, it’s nearer to 70%. The interesting thing is how the voting pattern will change. The September meeting saw three members dissent in favour of higher rates. Will they pull their vote for higher rates on the basis of the impending election? Some may take that as a sign of a politicised Fed; others may take it as a sign that the Fed is aware of the potential economic impact of the outcome of the US election. But within this, the accompanying statement will be scrutinised for signs of a strengthening of the resolve to raise rates in the following month. Naturally dollar volatility risks are greater around the time of the announcement at 18:00 GMT.

Talking of the US election – it’s difficult to pull away from the subject – the narrowing of the polls has seen Trump marginally ahead in the latest Washington Post-ABC News tracking poll. The US election is not a national poll though, so things will be complicated on the night. Nevertheless, these latest developments has seen expected volatility rise in both equities and FX. The dollar has weakened vs. the single currency and the yen, whilst gold has pushed ahead. So after the slumber that was setting in during most of October, the election is having an increasing impact on markets, something which is likely to remain in place between now and next Tuesday. There is little to distract on the data calendar between now and the Fed, but markets will be increasingly sensitive to US election developments through the day.


Source link  
Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...

Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...


Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...


Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

  


Share it on:   or