Risk appetite has been a primary feature of the market’s landscape throughout 2019 thus far. However, this speculative charge seemed to find its traction in hope – hope that trade wars were easing, central banks would raise support and growth would level out. Those hopes are wavering and so too is confidence.
The Australian Dollar gained when the US Fed struck a dovish tone last week. But markets soon realized that what applies to the Fed probably goes double for the RBA.
As more of the US Treasury yield curve sinks into inversion territory, concerns about global growth have flared – dragging down energy prices in the process.
Another week consisting of point, counterpoint, noise and rumors ends up with no-one any the wiser as to how and when Brexit will end. And yet Sterling continues to battle to keep its head above water.
Developments coming out of the U.S. may continue to drag on the dollar as ‘data arriving since September suggest that growth is slowing somewhat more than expected.’
Gold prices rose as a dovish Fed sent bond yields lower and fears of a recession subsequently increased. Near-term XAU/USD outlook neutral, precious metal eyeing US GDP and core PCE inflation.
The Euro may face further selling pressure as incoming data flow and downbeat ECB commentary weigh on policy expectations. Another Brexit vote threatens volatility.
The Dow Jones will cope with a dovish Fed and lower growth forecasts while European equity markets look to avoid a “no-deal” Brexit.
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