Election countdown

3 October, 2016

We start a new month and quarter, which is likely to be increasingly taken over by the impending Presidential election in the US, something which the market has largely managed to ignore up to now. To this end, the US employment report, due for release at the end of this week, could struggle to elicit the usual impact on markets, given that current market pricing has less than a 20% chance of the Fed moving rates a week before the election. The December meeting is another matter, where current market pricing puts the chances of a move as more likely than not, but given the Presidential election, that could well change substantially between now and then depending upon the result.

Looking to today, we start the week with sterling having gapped lower after the UK PM finally put a timeline on the UK’s exit from the EU. We’ve seen cable break below the 1.29 level at the start of the European session, whilst EURGBP is close to making new highs for the year, which could trigger further bearing activity on the sterling if seen. Elsewhere, the yen continues to retreat, allowing USDJPY to once again pull away from the 100 level. The Tankan survey overnight showed mixed messages on the state of the Japanese economy. Deutsche Bank is never far from the headlines, with much talk over the weekend from the German political establishment as to where we go from here. For today, we see UK PMI data at 08:30 GMT, with US USM data following at 14:00 GMT. Trading is likely to remain muted ahead of the US jobs numbers on Friday.


Source link  
FOMC expect to reach neutral policy

The FOMC minutes highlighted some increased risks to the US economy particularly concerning trade relationships but the view still holds that the Fed should...

US FOMC expected to raise rates again

UK Consumer Price Index (YoY) (May) is expected out at 2.5% against 2.4% previously. Producer Price Index – Input (YoY) (May) is expected...

PMI expected to weaken further

UK Construction PMI (May) will be out with an expected headline number of 49.7 from a prior number of 52.5. The consensus is for a drop in the numbers...


BOE Expected to Keep Rates at 0.5%

UK Industrial Production (YoY) (Mar) is expected to be 3.1% against a previous 2.2%. Industrial Production (MoM) (Feb) is expected to be 0.2% against...

Consumer Price Index Takes Centre Stage

UK Budget Report will be released. This is a mini-budget and outlines the government’s updated budget for the fiscal year, including infrastructure...

US earnings hit sweet spot for markets

The US Nonfarm Payrolls data released on Friday showed a strong increase in job creation and, combined with the lower than expected increase...


Bank of Japan interest rate decision

The Bank of Japan Interest Rate Decision was as expected and left unchanged at -0.1%. The Japanese 10-Year JGB yield target is around zero percent...

Oil Gains and GBP Stumbles

On Tuesday, the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week. That is almost twice...

Geo-Politics will be the focus of the week

This week will be dominated by Geo-Politics as the US Tax Bill needs to be reconciled between the Senate and House, whilst UK Prime Minister...

  


Share: