Will Powell Sound the Fiscal Alarm?

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FOMC Takes Centre Stage

Manufacturing production in the US expanded less than forecast as the US index steadied itself above 93.

Meanwhile, the US dollar will hinge on guidance from Fed chair Jerome Powell at today’s FOMC meeting.

We can expect the Federal Reserve to confirm that its interest-rate policy will remain unchanged and close to zero through the end of 2023.

Long Road to Recovery for the Eurozone

The euro closed moderately lower on Tuesday by 0.14% ending a 4-day winning streak.

The EURUSD pair managed to reach the 1.19 handle as German ZEW data was upbeat.

However, ECB board member Fabio Panetta closed the pair towards 1.18 stating that challenges to growth and inflation remain.

Choppy Waters Ahead for Sterling

The pound kept its head above water ending yesterday’s session 0.36% higher.

This is despite unemployment figures hitting 4.1% as almost 1 million UK residents have been out of work since March.

Foreign Secretary Dominic Raab is in Washington where he is expected to try to reassure US politicians about the latest Brexit twist.

Nancy Pelosi has already stated that there would be no UK-US trade deal if the Northern Ireland peace agreement was undermined.

Risk Sentiment Shifts on Trader Confidence

US indices closed higher yesterday pointing to the second day of gains on Wall Street.

Positive retail data coming out of China buoyed markets as investors look to the upcoming Federal Reserve meeting on monetary policy.

Hopes on the early development of a vaccine also helped push stocks higher.

Gold rose to a 2-week high above the 1970 handle as risk sentiment drove investors to sell US dollars. The weakness in the dollar lent support to the precious metal as appetite now looks towards the Fed.

Hurricane Season Looks to Push Oil Higher

WTI closed 3.9% higher yesterday as it looks to close in on the $39 mark.

Hurricane Sally will likely close oil refineries again on the Gulf of Mexico. Hurricane Teddy is next in line to hit the US border on the weekend.

In addition, we await the EIA report to find out where this could take the price of oil.

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