Hammond Needs to impress investors
Merkel; Another attempt for grand coalition
FOMC minutes may provide clue for December rate hike
European markets are showing some solid gains thanks to fresh all-time highs on Wall Street which is fuelled by more enthusiastic outlook for tax reform and stellar earnings
When it comes to sterling, it is all about the upcoming budget, and what Chancellor Philip Hammond could do to motivate the investors. He is in a very tight position; given all the drama which has been taken place. The Chancellor would have to bring the rabbit out of the hand to escape this one. Abolishing or reducing the stamp duty is going to do no wonders for him, he needs to increase the spending and also strike a balance with austerity to up his game.
The dollar index is still struggling to make gains in against major currencies, Having said that, the upcoming FOMC Minutes would be something which traders should pay attention too, better the devil you know (than the devil you don’t). During their last meeting, the Fed left investors scratching their head about their decisions on hiking the interest rate one more time. The fed reasoned that the labour market would strengthen further.
While the job market has not shown any considerable sign of weakness, we do believe that traders are widely expecting that the fed will increase the interest rate coming this December. The upcoming November FOMC minutes would provide further clues for this puzzle. However, if the fed is hesitant that would give a clear message to traders that they should start shaving off their profits from their trades, going into this upcoming long weekend.
It has been a dull session for the Euro, as the German Chancellor Angela Merkel prefers a new election rather than having a minority government. Ostensively, she is confident that she has the support of the public. As an investor, you do not want to see this uncertainty becoming prolonged. But the real question is if Merkel views it the same.
Investors are always keeping their focus towards the ECB’s stance on its Monetary policy. The EUR/USD pair would need some hawkish views from the ECB’s in order to break the resistance of 1.20. For now, it appears that the pair is doing nothing but consolidating.
