Weekly Fundamental Forecast: Global Markets Focus on Trade Wars Headlines, US Elections and Rate Decisions
While equities and other risk assets attempted to stabilize from October’s speculative tumble, the FX world experienced a jolt of volatility this past week. With systemic themes like risks trends and trade wars already agitated, anticipation for the US mid-term elections and a run of rate decisions will keep traders tuned in and anxious.
The New Zealand Dollar may be at risk if the RBNZ leaves the door open to rate cuts again while the 2018 US midterms carry levels of uncertainty for stocks, sentiment and NZD prices.
There are still few fundamental reasons to like the Australian Dollar more than its US cousin. However the market is now very short and may decide the Aussie has suffered plenty.
Less than a month ago, Crude oil was moving toward four-year highs that it hit on October 3. Now, WTI Crude is traversing at a six-month low toward a bear-market as the scary chart shared last week appears fateful.
Price action ahead of the Federal Reserve meeting raises the risk for a larger pullback in USD/CAD as the exchange rate carves a fresh series of lower highs & lows.
A decent week for Sterling bulls with GBP pushing ahead across a wide range of currencies. UK Q3 GDP is released next week, but as always Brexit oversees market moves.
The quiet economic calendar – there are no ‘high’ rated German or Eurozone data releases – means that the only potential catalyst in the days ahead is progress around Italy's budget saga.
Midterm elections are set to overshadow a monetary policy announcement form the Federal Reserve. Their outcome seems likely to be supportive for the US Dollar.
Gold set for another volatile week as markets focus on Mid-Term election outcome, while recent gains in the Yuan keep prices at elevated levels.
As a volatile October falls to history, November brings with it an opportunity for equity markets to regain their footing but achieving stability may prove easier said than done.
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