Global markets quiet, buck slightly negative
NOVEMBER 19, 2019
The U.S. Dollar remained in tight ranges overnight after an uneventful Monday. Overnight markets stayed quiet considering downside risks as Hong Kong’s violence between protesters and police continues.
Additionally, some retailers showed that they missed earnings estimates such as Home Depot, which experienced its biggest drop since the 2008 crisis. America-China headlines will be welcomed, but there have been mixed signals with some sources saying that American companies could get a license to work with Huawei while others claim China see little chance of a comprehensive deal soon.
As uncertainty keeps a strong grip on markets, we expect the familiar levels to keep going. A meeting between President Donald Trump and Fed Chairman Jerome Powell created some buzz as tweets revealed a discussion of negative interest rates. Moving forward, the Fed may experience external pressure to maintain an easing environment, which we believe will bode poorly for greenback prospects.
What to Watch Today…
- Housing Market Index 10 AM
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The Euro is trying to keep its momentum as it attempts a comeback based on economic optimism. Reports out of Brussels made investors happy as legislators in the European Union Parliament agreed to an increase in funds disbursement to provide higher spending on tackling climate change, youth unemployment, as well as education. Agreement on a budget is important as lawmakers prepare for the likelihood of no contributions from Britain anymore.
The Australian Dollar feels again after minutes from the last Reserve Bank of Australia meeting showed that the committee could see an argument to cut interest rates at their December 2nd meeting. They refused to make any moves on November 4th.
Awful labor figures, stress over the lack of trade progress and details, as well as anxiety over a changing China, are weighing on the Aussie economy. We foresee a weaker currency to end the year if indeed the cut materializes, but at 0.75%, it’s also very possible that officials hold back until they see some recessionary indicators since there is little room to cut.