FX Explained MacroWatch: w/c 30/09/19 – Trump impeachment enquiry

Intermediate

Recap: Trump impeachment enquiry and UK politics to the fore

Trump Pelosi
  • The main event last week was the publication of the conversation between US President Trump and the Ukrainian President. Subsequently, Nancy Pelosi (the House of Representatives Speaker), has initiated an impeachment inquiry into President Trump’s actions. The impact on riskier assets classes (notable stock markets) was negative.
  • Middle East stresses remain high in the wake of the September attacks in Saudi Arabia and although these tensions have not escalated, this sensitive situation has to be monitored going forward.
  • The US-Sino trade talks are set to resume in early October. The minor development the past week was President Trump stating in relation to a trade deal, “it could happen sooner than you think
  • In the UK, the English Supreme Court ruled that the proroguing of Parliament by the Conservative Government and Prime Minister Boris Johnson was unlawful. This leaves UK politics in a fragile position with a possible vote of no confidence in the Government this week.  The Pound has weakened due to this uncertainty, with Sterling significantly lower against the Euro and also the US Dollar.
  • European data continues to disappoint with German, French and Eurozone Purchasing Managers Index (PMI) missing market expectations. This saw a weakening of the Euro with the EURUSD Forex rate moving to its lowest level since 2017.
  • Overall, late September has seen a raising of geopolitical strains (plus the waning European data).  Global stock indices have plunged lower this past week, with safe haven bond markets pushing to lower yields. The US Dollar stays the strong currency in the Forex world as a safe haven, assisted by Federal Reserve Members indicating an “on-hold” Fed into year end.

Key this week

Date Key Macroeconomic Events
30/09/19 China Purchasing Managers Index (PMI), UK GDP
01/10/19 Reserve Bank of Australia Meeting, Manufacturing PMI (global), Eurozone CPI, US ISM Manufacturing
02/10/19 US ADP Employment Change
03/10/19 Non-Manufacturing PMI (global), US ISM Non-Manufacturing
04/10/19 US Employment report

Steve Miley

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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