Was last week the calm before the storm? After not much happening last week and a quiet start today, the rest of the week could be described as chaotic. Ignoring Brexit and US Elections for the moment, there is a full on schedule of economic data being released this week that could add a great deal of volatility to the markets.
There were also some interesting records broken on US indices last week and an ominous anniversary was marked! More on this later…
US interest rates are likely to remain the same this week but have a 74% chance of increase in December.
We’ve got plenty of interest rate calls this week. Tuesday sees Australia and Japan announce their interest rates. Both are expected to stay the same: 1.5% for Australia and -0.1% for Japan.
On Wednesday it is the USA’s turn. There is a 92% chance they’ll stay the same at 0.5% in November, but going forward there is a 74% chance we’ll see some sort of increase in December.
To round the interest rate decisions up, the UK set theirs on Thursday. Until last Thursday, when better than expected GDP figures were announced, there was talk that rates would be cut to 0.1%. This now looks unlikely and it is expected that rates will remain at 0.25% with a 0-0-9 vote.
Just to make the week a little bit busier, China release manufacturing PMI data on Tuesday and the US rap up a busy week with Non-Farms numbers on Friday!
GBP remains down but not quite out.
The US Dollar is holding on to slender gains but looking generally stronger. JPY and AUD have given back a lot of their recent strength, with JPY looking interestingly poised.
GBP is down but not quite out, but again looks like it is staring into the abyss! Turkish Lira versus the USD broke new record highs and is looking to establish a new base at these record levels.
Some very ominous records are being set on the S&P500!
The ominous anniversary? The Wall Street crash of 1929 happened on the Saturday just gone. If Trump wins the election, who knows where US markets may head?
The S&P500 has closed within 3% of its all-time high every day for the last 82 consecutive market sessions; a record unmatched since 1995. It also hasn’t reached a new high in 49 days. This marks the longest period the S&P 500 has avoided making a record —whilst still staying within 3% of its record—since 1928, before the onset of the Great Depression. The feel ahead of the elections is getting more bearish.
In the UK, the FTSE 100 is also hitting the buffers around the 7000/7100 area and hasn’t got the strength to push through. In the Far East the Nikkei 225 has finally broken out of the 16000/17000 range it has been playing in for such a long while. In China regional stock markets, following a strong recovery, now look to be giving up some of those gains.
$1250 looks a significant level for Gold.
In comparison to currencies and indices, commodities look particularly dull. In metals, the Base complex is consolidating, with Aluminium currently looking the pick of the bunch.
In PGM’s Gold and Silver look to be building a platform after the recent sell off. $1250 looks a significant level for Gold.
Crude Oil WTI once again looks to be heading weaker as the OPEC agreement of last month looks fragile once more. $51/$52 key overhead resistance. In other commodities, Coffee and FCOJ are looking stronger.
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Information provided by Stephen Hoad BA Hons, MSc, MSTA – full time trader, technical analyst and one of the UK’s leading trader trainers. Currently a lecturer for the Society of Technical Analysts.