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November 2016

Trump making gains

Published: Wednesday 02 November 2016

  • Trump making gains
  • Federal Open Market Committee (FOMC) rate decision tonight
  • New Zealand employment upbeat

The Dollar has continued to weaken so far this morning, in particular against the Euro. This is mainly on the back of political worries rather than economic data. With less than a week to go until the presidential election, latest polls are showing that Donald Trump is closing in on Hilary Clinton. Sentiments seem to have taken a sharp turn since the FBI opened up new investigations into Clinton's emails.

Markets will stay volatile with the world’s major central banks meeting up this week, however their impact could be overshadowed as new polls are released from the US. The Federal Reserve rate decision is a major focus today, although the Fed is widely expected to keep interest rates unchanged. Markets are generally expecting them to hike interest rates in December. Fed fund futures are pricing in 73.6% chance for that. That said, the decision very much depends on incoming data, such as the next two months Non-Farms data. Also, the result of the US Presidential Election will play an important role too.

On the data front, the New Zealand unemployment rate dropped to 4.9% in Q3, down from the previous quarter's 5.0%. That's the first sub-5.0 reading since 2008. Employment grew 1.4% quarter-on-quarter, much stronger than the expectation of 0.6%. That's also the fourth straight quarter of growth.

Meanwhile, Australia’s building approvals dropped -8.7% month-on-month in September, much worse than the expected of -2.8%. The contrast in economic data sends AUD-NZD sharply lower today. German unemployment data will be released later today but focus will all be on the US, as any polls will be closely watched.
 

Quotes


“I am a slow walker, but I never walk backwards” ― Abraham Lincoln 

“Be patient and calm; no one can catch a fish with anger.” ― Herbert Hoover

“When our memories outweigh our dreams, it is then that we become old.” ― Bill Clinton

“Forgive your enemies, but never forget their names.” ― John F. Kennedy

“Yes We Can!” ― Barack Obama

 

Today's Major Economic Releases
 

 
Market BST Data/Event Previous Expected
EUR 09:00 EU: Final Manfacturing Purchasing Managers' Index (PMI) 52.3 55.3
GBP 09:30 UK: Construction Purchasing Managers' Index (PMI) 52.3 51.9
USD 12:15 US: Non-Farm Employment Change 154k 166k
USD 14:30 US: Crude Oil Inventories -0.6m 1.6m
CAD 17:30 BoC Council Member Wilkins speaks    
USD 18:00 Federal Open Market Committee (FOMC) Statement    
USD 18:00 Federal Funds Rate <0.50% <0.50%

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Daily Currency Analysis by Michael Hart

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