Today’s Key Market Drivers: 27th February 2019
US Dollar falls after US Fed Chairman comments.
The US Federal Reserve Chairman Jerome Powell was speaking before a US Senate Banking Committee on Tuesday and said the Fed will remain patient with respect to further interest rate increases in 2019.
Some 80% of economists surveyed believe the US Fed won’t raise rates at all in 2019 and there may even be the possibility of a rate cut in early 2020.
The US Dollar’s major trading partners including the Pound, Euro, Caddy, Aussie, and Kiwi were all sharply higher post-Powell’s remarks. Powell is due to speak again to Congress on Wednesday.
US Consumer Confidence continues to shine.
They are the biggest consumers in the world and their confidence hasn’t been zapped just yet with the release of January US Consumer Confidence numbers showing another up tick this time to 131 from 124.9. Above 100 means consumers are feeling optimistic and below 100 pessimistic and with more jobs, lower taxes and strong growth why wouldn’t US consumers be feeling optimistic.
Living in the USA on and off for the last 30 years (my wife is American) I have learned that the US economy is unbelievably resilient and the US people are without a doubt the most optimistic and positive consumers on earth. There is an in-built level of confidence in America and it shows.
They also don’t suffer from the tall poppy syndrome that I personally think is a blight on Australian culture. Australia has a lot going for it but the tall poppy syndrome we are famous for around the world is self-defeating, negative and just plain dumb. I love it when people achieve success and win and I love it when they make loads of money. Push up success, celebrate success and be proud of other Australian’s achievements no matter who they are.
Don’t ever put down someone’s success because what you are doing is showing the true colours of a loser when you do.
The Pound gets a boost as Brexit day moves closer.
The British Pound has shot higher on the back of a weaker US Dollar and news that the UK Parliament will be able to vote on a new Brexit deal by March 12th. But what happens if the deal is voted down again?
CNBC reports this morning that Theresa May has said that if it fails parliament will immediately vote on ruling out a no deal Brexit by March 13 and then the likelihood is parliament would vote on extending the deadline of the Brexit exit of March 29 so a final deal could be reached.
Labor opposition party leader Corban says he’ll support another referendum but that appears unlikely at this stage.
Stocks are ripe for a pull back.
US stock markets have been on a tear higher for the past 8 weeks barely having a down day after the monster slide lower into Xmas. My tentacles (not to be confused with my technicals) are telling me we may be about to move back lower and the price action we are seeing on US stock markets and the daily trading ranges tell me the buyers might take a break shortly. But something is going to need to rear its head fundamentally before a pullback can occur. Here are a few things that are scheduled that could see traders hitting the sell button.
- A Trump Tweet following his meeting with President Kim. (not likely)
- A break down in US-China trade talks. (not likely)
- The market doesn’t like the US-China trade deal when announced. (probable)
- The US GDP numbers set for release this week miss estimates. (probable)
- US Fed Chairman Powell says something to Congress that is different to his previous comments on the US economy. (not likely)
- Something unforeseen. (probable)
It’s going to be something and when it occurs, I want you to know what it is and why it’s happening. History drives financial markets and at some point, there will be a catalyst for a move back lower.
Your secret to your success is found in your daily routine. AB
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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