Today’s Key Market Drivers – 5th October 2017

One concern that will continue to hang over the Euro like a bad smell in the short term is the ongoing independence fight in Spain between Catalonia and the Spanish Government. The region of Catalonia which includes Barcelona may try and declare independence from Spain in coming days and I am certain that this challenge for the Spanish government is far from over and threatens to drag on for years and not months. I said earlier this week I don’t expect it to derail the ECB’s policy plans but it will certainly be a topic of discussion and if Catalonia does achieve independence then I believe this would be a potential disaster for the Euro and it would be sold heavily as a result. If Catalonia manages to break free which I think is a low probability at the moment then it would highly likely be seen as a major blow for the Euro and the Euro Area as there are plenty of other regions in other countries that would also love independence.

Currency markets are crabbing sideways leading into Friday’s US Non-Farm Payrolls data although the US Dollar did initially soften when the Private ADP US Jobs Report said only 135,000 jobs were created in the month of September which is close to 100,000 fewer jobs than last month’s ADP report. Economists are predicting that only 80,000 jobs were created in the month of September suggesting employers would not likely have hired at the same rate due to the two hurricanes that hit Texas and Houston. After initially weakening when the Dow Jones opened for trading the US Dollar recovered when the latest ISM Non-Manufacturing figures released beat market estimates. Overall your charts will show you that for the past 24 hours price has been crabbing sideways on most of the major pairs and traders are struggling for any clear theme and direction. Those tight ranges are highly likely to be broken before platforms close on Saturday morning.

Today’s economic calendar shows Aussie Trade Balance data due but what will headline the economic calendar today is the ECB’s comments on monetary policy following last months meeting. The market has sold the Euro over the past month once the ECB confirmed it would likely reduce its stimulus program starting in October. As you will see in today’s 3-minute video update the selling pressure is starting to ease and if Friday’s US Non-Farm Payrolls data is a fizzer then a pop on the Euro back higher would be likely.

 

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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