Joshua Mahony MSTA
Scope Markets
European markets are on the rise ahead of today’s Federal Reserve meeting. Despite a likely US rate hike, a weaker dollar looks a distinct possibility.
-
European stocks rise ahead of Fed meeting
-
Dollar could deteriorate despite likely rate rise
-
UK inflation eases back amid falling energy prices
European stock markets have a much more optimistic tone in early trade, with the FTSE 100 rebounding sharply despite a strengthening GBPUSD and continued fears over Chinese growth. Overwhelmingly, markets are looking towards today’s FOMC meeting. The market is pricing in a 67% chance of a rate hike today, and Donald Trump’s attempted interference is likely to have pushed the committee towards a fourth 2018 rate rise rather than away from it. However, as much as the rate rise itself will be important, all eyes will be on the dot plot of future expected rate moves, with a shift towards a less hawkish 2019 outlook providing the basis for a potential dollar decline.
Today’s decline in UK inflation will have helped ease concerns at the BoE, with the slide in oil prices helping reduce some of the price pressures that have seen 22 consecutive months of above-target inflation. Crucially, with inflation declining throughout much of 2018, there is a good chance of hitting the 2% target in the coming months. With headline CPI some 100 basis points lower than the 3.3% rate of wage growth, Mark Carney & co will be hoping that this rise in real wages will drive higher consumer spending.
Ahead of the open we expect the Dow Jones to open 94 points higher, at 23,770.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD holds gains near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.