Today’s Key Market Drivers: 18th October 2018
“US Dollar rallies as 10 Year Yield rises again.”
We saw a resurgence in the US Dollar on Wednesday following the release of the latest US Federal Reserve monthly minutes that again confirmed the Fed is committed to tightening interest rates one more time before Xmas and will likely continue its interest rate tightening cycle, raising rates at least once a quarter in 2019. The Fed minutes was the catalyst for the S&P 500 struggling to make any gains after Tuesday’s strong rally. The US 10 Year Treasury Yield rose back higher to 3.2% up from 3.15% and remains a major barometer for stock market investors to watch. A higher 10 Year Yield means a lower stock market and a lower stock market will mean a higher Yen and Swiss Franc. I expect today’s Asian trading session to be mixed and likely open to the downside with both US and European markets giving a weak lead.
The Pound fell sharply against the US Dollar due to a combination of weaker than expected UK CPI missing estimates and a stronger US Dollar thanks to the Fed minutes. Euro Zone CPI data was also released and even though it met the markets estimates the greenback’s rally pushed all its major rivals lower with the Euro losing the most ground.
Today sees the release of the latest Australian unemployment figures which has the potential to move the AUD up to half a cent or more depending if the data is out of line with expectation. Leading economists expect the Australian unemployment rate to remain steady at 5.3% but it often isn’t the % that has the biggest impact, it’s the number of jobs created or lost in the month. The data is due at 11.30am AEDST. Australian Business Confidence numbers are also set for release but are not likely to overshadow the unemployment rate number. Japanese Central Bank Governor Kuroda is speaking today and his comments will be eagerly listened too by traders however it is unlikely he will say anything that will see a shift in market sentiment.
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About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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