US and Russian meetings will be closely followed to see the political fallout after the US missile launch on the al-Shayrat base. Janet Yellen is also expected to speak later in the day, which will probably have a significant impact considering the lacklustre payroll figures announced on Friday. Another US military movement that could affect markets is its activity around the Korean peninsula.
Euro has experience instability at the beginning of the week as a result of weekend polls that showed the French elections race might not be as close as thought. The only constant is that both front-runners are pro Frexit or proponents of France’s exit from the EU, mean that the Union would receive yet another gut-punch to its integrity and the one – currency policy. Because of this we can expect a possible uptick in Euro hedging in the next two weeks. If the French electoral race is neck and neck between Melenchon and Le Pen – which are both Frexit proponents – then we will most probably see another dip in EUR prices.
In the U.S., lower than expected payrolls cause general disappointment. Detractors point out that joblessness is low, and Feds expressed no intention to tighten policy over minor fluctuations. Janet Yellen speaking at 8pm GMT will be picked apart to make sure her reading provides a new direction in regards to QE. None the less the greenback holds strong (at least at first sight), but something that contradicts the “end of cheap money” could possibly boost US equity markets.
Australia saw an overnight dip in lending data, with home loans shrinking considerably in second month of ‘17. Australia’s overly zealous housing market has raised red flags at the country’s central bank so a constriction of home loans is actually a breath of fresh air and one less reason for the possibility of monetary policies becoming stricter. AUD/USD ended up losing the 0.7500 handle because of the aforementioned shrinking of home loans, and hopefully this doesn’t shake consumers’ confidence. Although a recession might not even be a far reality, halted spending might make people think a downwards-trend in beginning.
The UK BRC retail sales will be announced at 11pm GMT tonight and taking into consideration the Sterling’s recent volatility this will be closely monitored news. Confidence in the currency is expected to peter out especially with the onset of Brexit processes.
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This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
