MacroWatch – Fed cuts rates and a UK general election for December

Intermediate
  • The Federal Reserve met last Wednesday and as markets had priced in, a third 2019 rate cut for 2019 was delivered by the Federal Open Market Committee (FOMC). The FOMC also indicated a pause, that the “mid-cycle adjustment” was complete (for now). US equities and stock averages pushed higher (as did global share markets), whilst the US Dollar sold off against major currencies as US Bonds rallied to lower yield levels.
FOMC
  • The US Employment report Friday was strong, with the Non-Farm Payroll (NFP) data much better than the consensus numbers. Data for October saw 128K jobs added (with consensus for 89K), whilst the September numbers were adjusted higher from 136K up to 180K. Prior to this data on Friday Chinese factory activity in October grew at its fastest rate for over two years (according to the Markit China Manufacturing Purchasing Manager Index, PMI).
  • The combination of the Fed rate cut and better US and Chinese data saw both the US benchmark average, the S&P 500 and the tech-heavy Nasdaq 100 achieve new record highs.
S&P500
  • The UK focus has now moved away from the Brexit saga after the 31st October 2019 deadline has been extended to the 31st January 2020. The attention is now on the snap general election, as on 12th December the UK now goes to the general election polls. This brings fresh ambiguity and indecision, as the major political parties hit the campaign trail in November, with countless opinion polls punctuating the trading environment. You can see a longer term History of the Pound here and an article we have recently published here on CNBC on the risk for the Pound and GBPUSD into the general election.
Brexit
  • Ongoing reports and rumours from the US-China trade talks have hit the newswires this past week with Bloomberg citing unnamed Chinese officials on Thursday, indicating a long-term US-China trade deal was going to be difficult. Then the Chinese state-media News Agency (Xinhua) said Friday that China and the US have “reached consensus on principles”.
  • The impeachment enquiry of President Trump rolls on in the US with subpoenas issued and further testimony likely this coming week.

Impeachment

Key this week

  • From the Central Banks, the Reserve Bank of Australia (RBA) meet to decide interest rates on Tuesday with the Bank of England (BoE) meeting on Thursday. Neither Central Bank is expected to change interest rates.
  • On the macro data side, we get European Manufacturing PMI data Monday, Tuesday sees the release of US ISM Non-Manufacturing PMI, whilst European Services and Composite PMI data are published Wednesday. Then Thursday brings German Industrial Production and the Chinese trade data and the Canadian Employment report hit the wires Friday.
  • On the geopolitical front, UK election developments and opinion polls will be in focus, together with US-China trade talk progress (or setbacks).
Date Key Macroeconomic Events
04/11/19 European Manufacturing PMI; US Factory Orders
05/11/19 RBA interest rate decision; US ISM Non-Manufacturing PMI
06/11/19 New Zealand Employment report; European Services and Composite PMI
07/11/19 German Industrial Production; BoE interest rate decision
08/11/19 Chinese trade data; Canadian Employment report; US Michigan Consumer Sentiment Index

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

Comment on this video

Your email address will not be published. Required fields are marked *


Latest Related News

Pound stays vulnerable to losses – GBPUSD forecast

The Pound Sterling has been under downside pressures over the past week and in fact since the start of 2020.This has been driven by three factors with respect to the GBPUSD Forex rate:A more dovish tone from at least three members of the Monetary Policy Committee of the Bank of England, including outgoing Governor Carney, with new voices for a possible rate cut being raised… Continued

GBP/USD Selling Breaks Cloud Top Brings 1.2902 Swing Into Focus; Short-Sterling On Verge of Range Resolution

GBP is under broad pressure as dovish weekend comments from Bank of England’s monetary policy committee ratchets rate cut bets. Jan. 31 BoE rate cut odds jump to 50-50 vs. a 0% chance of a move just a week ago. GBP/USD has pierced key support from the Ichimoku Cloud Top and pressures a move to key swing low at 1.2902; below here would bolster negative risks… Continued

Previous signals confirmed with US Dollar strength

US Dollar rotates up (DXY)Euro down (EURUSD)Pound hovers above final short term support (GBPUSD)Major signals in the Japanese Yen (USDJPY bullish) and Canadian Dollar (USDCAD bullish). Continued

GBPUSD forecast remains to the downside

Global financial markets have seen some aggressive swings to tart 2020 with the tension in the Middle East, particular on the individual stock and equity index, alongside the Gold and Oil markets.On the Forex side, however, despite a choppy tone to USDJPY and Japanese Yen cross rates (due to the aforementioned tensions and the Japanese Yen’s position as a safe haven currency), FX markets have… Continued

New Year signals Forex reversals

US Dollar Index (DXY), Euro Dollar (EURUSD), Aussie (AUDUSD) and Pound (GBPUSD) all signal reversalsUptrend ends in the Kiwi (NZDUSD) Continued

Forex Brokers in your location