Today’s Key Market Drivers: 25th September 2018

“Who is this guy?”

With a lack of economic data and Central Bank statements early in the week financial markets as expected where rangebound. The Euro began to rally post the European trading session opening, however, those gains were erased through the US trading session as some negative political news hit the headlines which will most likely wash over markets within 48 hours.

Deputy Attorney General Rod Rosenstein was rumoured to be resigning or sacked but neither outcomes appear to have happened by the closing bell and a statement has been released from the White House saying Trump and Rosenstein will meet on Thursday. The market had nothing better to gravitate to on Monday and the news surrounding the Deputy Attorney General isn’t going to be a game changer and it certainly won’t last long particularly when the US Federal Reserve’s statement is due on Thursday morning at 4.00am AEST.

The reason the Rosenstein story is getting any traction at all is because the US is about to have their midterm elections and some pundits are suggesting if he quits or resigns it will impact who wins control over Capitol Hill. Currently, the Republicans (the US equivalent to the Liberals) have control over both the house and the Senate and the midterm elections will likely give financial markets an indication on whether or not Donald Trump is going to be a one-term or two-term President. If the Democrats win back control of the House and Senate we would likely see increased volatility on financial markets in the short-term as it would leave a degree of uncertainty hanging over the US political system.

The Euro and Pound both held up reasonably well given the negative sentiment that settled across financial markets in the US trading session. The Aussie and Kiwi Dollars are now well off their recent highs and are pulling back into Wave #4 on the 4-hour chart and I suspect on Thursday morning post the Fed statement we may see another push back higher on both currency crosses.

Sadly, today’s not going to be much better with respect to market volatility and I suspect the general risk-off and cautious sentiment will continue into Tuesday and possibly Wednesday. As I said in my Sunday PreMarket Prep Video this week is all about the US Fed and what forward guidance its gives markets on future interest rate hikes and how they view the trade tariffs impacting US economic growth.

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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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