Peter A Rosenstreich
Swissquote Bank Ltd
Coming up to the USA’s federal government shutdown, the American economy was in acceleration mode. Although new data are scant, it appears shutdown will have more negative effect than originally forecast. Traders should be prepared for disappointment. The US yield curve continues to flatten; consumer sentiment has weakened. The chaos on Capitol Hill mirrors the real effect of the shutdown on American life.
Meanwhile in the EU, most of the negatives, especially weak German growth, have been priced in to the single currency. Moving forward we can expect a pick up. While the global economic backdrop is hazy, fiscal conditions are loosening. Germany’s ruling party has indicated tax cuts while France has rolled back its interest rate hike. This week the European Central Bank is expected to signal a rate hike for September 2019.
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This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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