Today’s Key Market Drivers: 21st November 2018

“Wall street slides as slowing global growth fears grip financial markets.”

The safe haven currencies were all the rage on Tuesday as global stock markets took another leg to the downside with Asian, European and US stock markets all falling sharply. The Dow Jones the world’s most-watched stock market fell by 600 points at the close of trade with the S&P 500 and Nasdaq both down another 1.6%. The sharp sell-off on Wall Street saw the traditional safe haven currencies the Yen, Swiss Franc and US Dollar well supported with the greenback the big mover after Friday and Monday’s sell-off following comments from US Fed officials. When stock markets fall as sharply as they did on Tuesday the US Dollar is going to traditionally perform far better than the Euro, Pound, Aussie and Kiwi Dollars. Whilst the US Dollar did see plenty of buyers on Tuesday my longer-term view is it will likely decline in value if traders continue to price in their expectation of slowing US growth in 2019. I believe today’s rally on the US Dollar was a knee-jerk reaction and the move higher always happens when stocks fall sharply. I am just warning you that I think it is dangerous to fall in love with a higher US Dollar.

It certainly appears traders are continuing to price in their expectation of slowing growth in 2019 and when you have the world’s biggest bank Goldman Sachs predicting a sizeable slowdown in the US economy and US Fed officials backing this up with comments about global growth slowing next year with higher interest rates in the USA strong company earnings will be harder to come by and therefore traders are taking the view “sell now before its too late”. If the Fed does hike rates again in December as they have said they would, then US stock markets are highly likely going to continue to decline and the safe haven currencies such as the Yen and Swiss Franc will continue to rise.

Theresa May is on her way to Brussels to try and secure a Brexit deal and I continue to warn traders about taking positions on the Pound whilst Brexit volatility persists. Today sees no high impacting news until the European trading session gets underway with an OECD Euro Area economic outlook report set for release and in the US trading session, we will see the release of Durable Goods data which is essentially a retail sales number for goods that are supposed to last more than 3 years. The big-ticket items such as washers, dryers, TV’s, furniture etc.


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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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