USDMXN Trumpometer: markets have named a winner

Market Highlights

• Trumpometer

• GoldGold & Oil Signs of Strength

• Draghi's Big Day

Please note: All data, figures & graphs are valid as of October 20th. All trading carries risk. Only risk funds you are prepared to lose.

The Trumpometer

The markets have named a winner. Here's the chart of the USDMXN around the time of last night’s debate. The white square shows the actual debate time.

(Remember: A move up indicates a weaker Peso, which is generally associated with positive Trump sentiment.)

As we can see, Trump started out strong then lost it in the middle, only to recover by the end.

After the show was over, the media chose to focus on Trump's refusal to acknowledge the results of the election should they go against him, which is of course a very dangerous thing to say and we can see the Peso soared.

In a piece from Bloomberg this morning we can see that, like the polls that are showing a clear win for Hillary, the Peso is getting stronger at the thought of open borders with the US.

But there's other things happening in the markets now that are potentially a lot more exciting.

Draghi Day

Today the market will be more concerned with President Draghi.

Today, the European Central Bank will be under the microscope as they announce their interest rate decision, which will be followed by a press conference with the president.

No major policy changes are expected today, but they do have the option to surprise the markets if they're feeling bold.

The big question on the table that analysts will be scrutinizing is the time frame and scope of the ECB's QE asset purchase program. They are currently buying a massive €80 Billion worth of financial assets every month but this program is set to expire next March.

Now, Draghi has stated many times that they will "do whatever it takes" to fix the issues, and this program can and likely will be extended past the March deadline as needed. However, there have been rumours floating around that the program may not be extended or that it may be extended with a smaller amount of monthly purchases.

In today's speech, we'll be looking for clues about what will happen in March. Dove or Hawk, that is the question.

Two Technicals

One funny thing that I wanted to point out in the markets. The USDOLLAR has been gaining a fair bit of strength in the past few weeks. However, both Gold and Oil, who usually trade against the Dollar, are showing some small yet significant signs of strength.

Oil reached a 15 month high yesterday, strengthening its position above $50 a barrel.

Gold rose $13 an ounce yesterday from peak to trough with a bulk of the move happening within a 20 minute window.

All this on the backdrop of an anaemic stock market is certainly pointing to something, though it's hard to say what at this point, we may be just in the beginning of a very powerful swing.

I'll leave you with this chart that shows all 4 of the above mentioned assets since the beginning of the week. Make of it what you will.