Today’s Key Market Drivers: 22nd August 2018

“Trump just approved these himself for printing.”

The trends we saw on Monday continued into Tuesday with the US Dollar once again struggling to gain any traction higher leading into Wednesday’s Fed Minutes release. Stocks, as I expected, continued to remain bullish with the S&P 500 touching an all-time record high as the US economy continues to steamroll through 2018. I am more than happy to admit defeat at this stage on my prediction of a tough year for US stocks. My anticipation of a weaker stock market in 2018 was based on US interest rates rising and hedge funds and banks moving money out of stocks and into fixed income and bonds. It doesn’t pay to be a pessimist in the stock market.

Donald Trump this week criticised the US Fed saying he was not thrilled to see the Fed continue its tightening cycle. He said that he should be given some help from the Fed (no more rate hikes). His comments in an interview with Reuters News Agency was Trumps subtle and frankly arrogant and disrespectful attempt to talk the US Dollar lower and goes to show he has no regard for the US Federal Reserve’s independence. Quoting a paragraph from a CNBC online article. “Trump told CNBC that he understands that commenting about the Fed might upset some, but he does not care. He has said he respects the Fed’s independence but is worried that the rate increases will disrupt the economic momentum.” Trump wants a lower US Dollar as it obviously makes US exports more competitive. He also criticised the Chinese and European leaders this week saying they manipulate their currencies. That’s the pot calling the kettle black as he does exactly the same thing when it suits him. Given Trump’s comments, I would suspect the US Dollar to remain under pressure as we head into Wednesday.

The economic calendar today shows the US Federal Reserve’s August monthly minutes are set for release at 4.00am AEST Thursday morning. This is the only piece of high impacting economic data set down for Wednesday in the US. Traders are going to look for any signs of when the US Fed will raise the official cash rate again and the market is currently pricing in September as being the next month when they pull the trigger. Canadian Retail Sales has the potential to move the CAD up to 25 – 50 tick if out of line with expectations but will not get the market’s attention for long.

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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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