An outlook on EM markets, the rising USD strength on policy divergence and the future policy for the ECB were the topics chosen by James Hughes, Market Commentator for eToro, and Tony Cross, Market Analyst for Monk Communications, from the weekend’s newspapers on the Tip TV Finance Show.
EM outlook frightens away all but the bears
On this headline, Hughes and Cross outlined that the sell-off over the last few weeks has been down to Emerging Markets, and they reflected back to September where overseas events including EM held back a Fed rate hike. Thus they concluded that a December US interest rate hike is in the balance, as although overseas economic risk has fallen, US data has also softened.
Dollar set to gain pace from policy divergence
Hughes and Cross highlighted that the ECB are planning more QE, whilst the Fed may tighten monetary policy in December, which led to the EUR/USD parity discussion to be re-ignited, with 1.07 noted as being the point of control.
Paris attack rattles market as ECB readies cash injections
The extension of QE was already a plan before the Paris terror attacks, according to Hughes and Cross, who believed that France has never been economically safe, noting the economy being on the edge of the Eurozone crisis. They continued that Draghi is to speak later, and is likely to follow Yellen and attempt to prepare the market for action in December from the ECB.
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