FxExplained MacroWatch: w/c 23/09/19 – Fed rate cut overwhelmed by Trade and Middle East tensions

Intermediate
Jerome Powell
  • The geopolitical driven event last week was the aggressive oil price surge in reaction to the attacks on the Saudi Arabian oil fields.
  • The oil price quickly reversed back lower, however, as it materialised that the output shortfall would not be as drastic as first supposed.
  • BUT Saudi Arabia have stated they see Iran as the attack source, whilst Iran have indicated they will respond to any military provocation.
  • This leaves Middle East tensions high.
  • The central bank event last week was the US Federal Reserve cutting interest rates by 0.25%, though the tone from the Fed was mixed.
  • It would seem that the Fed are likely now in pause mode watching the data, with further rate cuts this year now seen as unlikely.
  • Brexit continues to overshadow UK markets with the Bank of England side-lined, awaiting developments.
  • The UK government and EC’s Junker signalled progress was being made, sending the Pound higher, but any such progress was rejected by several EC sources.
  • Hopes of progress in easing the US-China trade conflict were somewhat dashed Friday, as Chinese officials cut short their visit to the US.

Key this week

Date Key Macroeconomic Events
23/09/19 Global Purchasing Managers Index
24/09/19 Bank of Japan & Reserve Bank of Australia Governors speak
25/09/19 Bank of Japan Minutes; Reserve Bank of New Zealand interest rate decision
26/09/19 US GDP
27/09/19 US Personal Consumption Expenditure (PCE) and Capital Goods Orders

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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