Liquidity moves by the Chinese central bank and dovish noises regarding the Fed meeting have seen markets make tentative gains this morning.
Last night’s US session saw the Dow finish at a new all-time closing high, with a fresh intraday high to boot, and the positive momentum has been carried across into the morning session in London. Added to this was news last night that the ‘No’ campaign still has the advantage – albeit a small one – over its rivals. The IG binary has seen the ‘Yes’ chance edge back to 19%, its lowest level since 12 September. With the postal votes having already been cast (and many of those likely to incline towards the Union), the ‘Yes’ campaign still has to make up much ground on the day, even with its late-stage surge in the polls. The stage is set for some significant volatility in GBP/USD during the overnight session on Thursday, with moves exacerbated by thinner volumes. Sterling remained in focus this morning as an overwhelming tide of data hit the newswires. Unemployment was down once again, but the modest rise in wages and no change in the MPC voting patterns meant that the pound could not hold on to $1.63 against the dollar.
US indices are looking more confident heading into the Fed meeting, as the US dollar sees some modest selling on expectations that the Fed meeting won’t see the ‘considerable time’ reference eliminated from the statement. Arguably this leaves the market as complacent about US interest rates as it was two weeks ago, but it will mean that equity indices should recover some of the upward momentum that has been lacking in recent sessions. Ahead of the open, we expect the Dow to start 12 points higher at 17,143.
Last night’s US session saw the Dow finish at a new all-time closing high, with a fresh intraday high to boot, and the positive momentum has been carried across into the morning session in London. Added to this was news last night that the ‘No’ campaign still has the advantage – albeit a small one – over its rivals. The IG binary has seen the ‘Yes’ chance edge back to 19%, its lowest level since 12 September. With the postal votes having already been cast (and many of those likely to incline towards the Union), the ‘Yes’ campaign still has to make up much ground on the day, even with its late-stage surge in the polls. The stage is set for some significant volatility in GBP/USD during the overnight session on Thursday, with moves exacerbated by thinner volumes. Sterling remained in focus this morning as an overwhelming tide of data hit the newswires. Unemployment was down once again, but the modest rise in wages and no change in the MPC voting patterns meant that the pound could not hold on to $1.63 against the dollar.
US indices are looking more confident heading into the Fed meeting, as the US dollar sees some modest selling on expectations that the Fed meeting won’t see the ‘considerable time’ reference eliminated from the statement. Arguably this leaves the market as complacent about US interest rates as it was two weeks ago, but it will mean that equity indices should recover some of the upward momentum that has been lacking in recent sessions. Ahead of the open, we expect the Dow to start 12 points higher at 17,143.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.