Today’s Key Market Drivers – 2nd November 2017

Trump to likely choose Jerome Powell as the next US Fed Chairman.

Before he leaves for a 12-day tour of Asia, President Trump is highly likely going to announce that Jerome Powell will be the next US Federal Reserve Chairman taking over from Janet Yellen who will step down from her 4-year term. Traders have already priced into the market Powell’s appointment so I don’t anticipate any sizeable moves when Trump officially announces his captains pick today. Powell is likely going to be out of a similar mould to Janet Yellen and won’t be an overly hawkish Fed Chairman and try and lift rates too quickly. Trump could have picked Yellen to serve another 4 years and remain in the top US Fed job but after Trump’s comments about Janet Yellen through the Presidential campaign last year she was always going to get the DCM if he won the Presidency and when her term ran out. I doubt there will be a private tea and scones get together with Trump and Yellen on the balcony of the White House to say thanks for your service.

The US Fed said in its monthly statement on Wednesday that US economic growth was solid and kept the official cash rate at 1.25% as expected and gave no indication that it would detour from its planned interest rate increase in December which would bring the cash rate in the USA higher than Australia. The last time this occurred the AUD v USD was 0.50c and the year was 2001. This coming Friday the official US jobs report will be released however a private report released on Wednesday showed 235,000 jobs were created in the month of October again underpinning the solid economic data the US has been delivering.

The Bank of England is releasing its monthly statement today and traders have been pricing in a rate hike from the BOE when they announce their decision tonight at 11.00pm AEDST. In today’s video report I talk about the importance of a key trend line and if the BOE does not raise rates and are more bearish than hawkish the GBP v USD could signal a move back lower in coming weeks and months. Aussie Trade Balance data is due this morning and I continue to believe the Aussie Dollar is destined for lower levels and shorts should be considered on value propositions.

 

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 key-note 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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