Today’s Key Market Drivers: 30th October 2018
“Euro heats up as German leader Merkel announces she will step down.”
Currency markets remained mixed on Monday as US stock indexes slipped lower once again. The Dow Jones closed down 1% officially taking it into correction territory along with the S&P 500 that fell another 0.66%. Traders continue to move money out of riskier stocks and into fixed income as they price in their expectation of higher US interest rates in December and throughout 2019.
The Euro was volatile through the European and US trading session after German Chancellor Angela Merkel announced she would be stepping down as leader of Germany after her current term in office ends in 2021. Merkel has led Germany for 13 years and has been seen as a stabilising influence across the Euro Area in times of political and economic uncertainty. In recent times the CDU Party which she leads has not fared well in regional elections across Germany. The bottom line is that if she does not retire at the end of this term based on current results she would risk heavy defeat. Today is an important day for economic data releases for the Euro Zone with German Inflation and Unemployment data and French, Italian and Euro Zone GDP figures set for release.
The Pound remains nervous ahead of the UK Chancellors Budget Speech and with Brexit negotiations still dragging on there is one clear direction for the Pound at present and that is down.
US Personal Consumption Expenditure data met the market’s estimates when released on Monday which gave traders no reason to rally the US Dollar immediately after. The 10 Year US Treasury Yield moved slightly higher to 3.08% and also failed to give traders reason to buy back into the US Dollar. CNBC reports today that “speculators’ trimmed their net long bets on the U.S. dollar slightly in the latest week, they remain positioned significantly long the greenback, data on Friday showed.”
October has been another solid profitable month and I look forward to continuing the momentum into November and December. I will be taking a break from trading between December 21st and January 2nd and relocating with my family to Melbourne for all of January. I will be encouraging traders to consider taking a break over the Xmas to New Year period as currency markets lack the usual volume and volatility and no Trade Time alerts will be sent through this period and the LTG GoldRock office will be closed.
The Asian trading session is free of any high impacting news today although Australian Building Approvals data is set for release at 11.30am AEST and has the potential to move the AUD around 25 ticks if out of line with expectations. The AUD and NZD weakened through the US trading session as stock markets retreated once again. Keep in mind the usual correlation is when US stocks fall the AUD and NZD also generally fall as the US Dollar acts as a safe haven currency.
Please ensure you are following me on the social media channels of TrainWithAndrew. Each evening I now go live on Facebook at 7.30pm AEST for a 5 to 10-minute chat as I share my insights on what data and theme is likely going to drive currencies through the European and US trading sessions. I also provide an opportunity at the end of each Facebook Live session for a few questions.
Any trade updates throughout the day will be sent via Trade Time. You can also follow my daily updates on Facebook, Twitter, Instagram by searching for TrainwithAndrew. Make sure you subscribe to the Andrew Barnett YouTube channel after watching today’s Sunrise video below.
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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