HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
MultiBank Group information and reviews
MultiBank Group
84%

Stocks under pressure amid US election jitters, dollar extends gains


24 October 2024 Written by Raffi Boyadjian XM Investment Analyst Raffi Boyadjian

Wall Street headed for weekly losses

The rally on Wall Street came to an abrupt end this week as uncertainty about the looming US presidential election as well as about the pace of Fed rate cuts undermined confidence in risk assets. The S&P 500 closed down for a third straight session on Wednesday, losing more than 1% so far this week.

Several Fed officials have been on the wires this week, most of whom made the case for ‘gradual’ rate cuts. Worried about policy being too restrictive, San Francisco Fed President Mary Daly was notably in the minority and investors have started to price in the possibility of the Fed pausing at one of its upcoming meetings.

Although a rate cut in November is almost fully priced in, there are growing doubts if the Fed will cut again in December and January is even less certain.

The paring back of rate cut bets since the September meeting has spurred a rebound in US Treasury yields, with the 10-year yield reaching a three-month high of 4.26% yesterday.

Trump creeps up in the polls

But the shifting outlook on the Fed rate path isn’t the only thing driving yields higher. Donald Trump’s recent gains in the polls have started to worry investors as he fast closes the gap with Kamala Harris. The Republican candidate is campaigning on big tax cuts and higher tariffs, both of which are seen as being inflationary for the US economy.

The real risk of the Fed’s easing cycle being derailed by a flare up in inflationary pressures has started to spook markets as the November 5 election day approaches. Despite Trump’s economic policies being broadly more positive for stocks than Kamala Harris’s, it seems that many investors do not welcome the uncertainty that some of his more radical ideas and his unpredictable nature would bring if he were to return to the White House.

Trump risks are also bolstering gold, which is rebounding today after pulling back from fresh record highs on Wednesday. The jump in yields likely sparked some profit taking but with so much uncertainty surrounding the US elections and the crisis in the Middle East, it’s hard to be bearish on gold currently.   

Dollar stands tall, yen takes the biggest punch

With yields surging, and election risks setting in, the US dollar has been on a roll this month, rising to a near three-month peak and on track for a fourth straight week of gains. The greenback’s unexpected strength has been very bruising for the yen, which has lost almost 6% in October.

The Bank of Japan remains wary about hiking rates too quickly, making a yen rebound unlikely in the near term. Speaking at an IMF panel discussion yesterday, Governor Ueda said “it’s still taking time” to reach the 2% inflation target sustainably.

The euro has been under pressure too as the ECB considers whether to cut rates at a faster pace. The flash PMIs for October were somewhat mixed today, but overall, growth remains very feeble across the Eurozone.  

The pound has also fallen below key levels against the dollar, with BoE Governor Andrew Bailey hinting at further rate cuts by sounding upbeat on inflation in remarks at the Institute of International Finance yesterday. But it’s a little firmer today despite slightly disappointing UK PMI readings.

The Canadian dollar, meanwhile, is on a steadier footing following yesterday’s dip from the Bank of Canada’s decision to slash rates by 50 basis points.

By XM.com

#source


RELATED

Thin liquidity and month-end could keep the dollar under pressure

Pending a major development, the week is likely to finish on a quiet note as the US markets will open today but close early. With Fed speakers taking a back seat this week, geopolitics dominated the headlines.

29 Nov 2024

Nvidia fails to lift markets, dollar stands tall

Equity markets continue to trade with lackluster momentum, struggling for direction even after AI giant, Nvidia, announced outstanding third quarter earnings.

21 Nov 2024

Gold edges up amid Ukraine tensions, stocks and dollar subdued

Gold rebounds as Biden lets Ukraine use long-range missiles on Russia. Yen slips again after Ueda offers no clues on December hike.

18 Nov 2024

Wall Street loses more steam as Powell not in a hurry to cut rates

Fed rate cut expectations were dramatically pared back on Thursday after Fed chief, Jerome Powell, rounded up the week’s hawkish rhetoric by adding to the sense of caution about the pace of easing.

15 Nov 2024

Dollar extends gains, bitcoin soars but stocks lose momentum

Speculation about the expected impact of Donald Trump's policies continues to dominate the market theme, as investors await details about who will be in Trump's cabinet. The US dollar advanced to four-month highs against a basket of currencies.

12 Nov 2024

Fed delivers rate cut, stocks rally but dollar not impressed

The market is convinced that another 25bps rate cut will be announced on December 19, as it is currently assigning a 92% probability to this outcome.

8 Nov 2024

Markets hold their breath as America votes

The countdown for the biggest event of 2024 is finally over as in a few hours around 80 million registered voters will cast their vote across the United States.

5 Nov 2024

Wall Street lifted by earnings as election jitters boost gold

Despite pledges for lower taxes and less regulation, markets are nervous about the prospect of Trump returning to the White House amid his chaotic and confrontational style of leadership.

30 Oct 2024

Oil slumps after Israel's attack; yen slips on Japan election shock

Oil prices tumbled as trading got underway on Monday, opening with a gap down as investors responded to Israel’s retaliatory attack against Iran on Saturday.

28 Oct 2024

Gold and dollar edge up as markets bet on Trump win

Gold extended its record streak at the start of the new trading week as investors increasingly bet on Donald Trump winning the US presidential election on November 5.

21 Oct 2024

US dollar could benefit from an unexciting ECB meeting

The euro remains on the back foot as it continues to underperform the dollar. The pair has dropped to the lowest level since August 2 with October shaping up to be the weakest month for euro/dollar since May 2023.

17 Oct 2024

Stocks under pressure by chipmakers, pound slips on CPI drop

Equity markets suffered a setback on Tuesday after Dutch semiconductor giant, ASML, sparked panic about the demand outlook for chips when it accidentally published its earnings report a day early.

16 Oct 2024

Dollar edges up, stocks muted as China stimulus underwhelms

Chinese officials unveiled more measures to shore up the country’s embattled property sector while also pledging further support for businesses and consumers in two separate announcements on Saturday and Monday.

14 Oct 2024

Wall Street hits new record after Fed minutes, CPI eyed next

Fed minutes show split over September cut but Wall Street rallies; Dollar eases from near 2-month high as focus turns to CPI report; Gold and oil steadier after recent losses

10 Oct 2024

Risk appetite ebbs as markets fret over China stimulus, Fed rate cuts

Chinese traders returned from a week-long holiday today and hopes were high that the government would unleash more big packages to support the flagging economy.

8 Oct 2024

Will the dollar or stocks smile after the non-farm payrolls print?

Spotlight falls on the key US labour market data. Non-farm payrolls to rise by 140k, but could surprise to the upside. Dollar to enjoy a strong set of data, equities prefer weaker prints. Euro suffering continues, while both gold and oil advance.

4 Oct 2024

Markets maintain upbeat mood ahead of PCE inflation

China stimulus and rate cut bets propel stocks higher. Dollar caught in choppy trading as crucial inflation data awaited. Yen surges as new LDP leader in favour of rate hikes set to become PM.

27 Sep 2024

Euro sinks on poor PMIs, dollar firms ahead of Fedspeak

Eurozone PMIs dip into contraction zone, euro takes a dive. Stocks mixed as weak PMIs offset optimism about China stimulus. Dollar edges up as after Waller comments. Powell and PCE inflation eyed next.

23 Sep 2024

Daily Comment Let the Fed rate cuts begin

Dollar trades indecisively ahead of important Fed decision. Investors assign a strong 60% chance for a 50bps cut. Wall Street and gold traders also on the edge of their seats. Pound rebounds on sticky UK inflation.

18 Sep 2024

Dollar sinks, gold surges as 50bps Fed cut back in the picture

Soft US PPI and reports of Fed dilemma revive bets of 50bps cut; Dollar plunges as yields fall, pushing gold to new all-time high. Euro climbs as ECB trims rates but does not signal October cut.

13 Sep 2024


Editors' Picks

Regulation Matters: Why a Licensed Forex Broker Should Be Your Top Priority

Choosing a regulated broker is not just a matter of preference; it is a necessity for safeguarding your investments and ensuring that you trade in a fair and secure environment.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2024

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs 2024 – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
Octa information and reviews
Octa
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.