Election

The Fed is seen as nearly 50/50 to cut interest rates again in December after Donald Trump and the Republicans secured a “Red Wave” last week - see what to expect from US CPI!

If you haven’t heard already, Donald Trump has been elected as President of the United States. flipped the senate and on the cusp of taking the house. A risk-on session ensued, which played nicely for AUD/JPY bulls - who now have 103 in focus.

The immediate response in the commodities space to the Republican’s clean sweep victory has been a bearish one - especially for industrial metals. Copper and silver fell over 4% each, tracking weaker iron ore prices, while gold was off by around 3%. Crude prices fell too but came sharply off their earlier lows.

Markets are making big moves on the back of Trump’s win and if House results confirm a Republican supermajority, there could be drive for even further highs in stocks and Bitcoin. The US Dollar, however…

The rationale behind the US stock market rally is that Trump is seen as business-friendly and will be able to pass on his tax cuts through easily without much resistance from the democrats who have lost control of the senate.

We saw the usual risk-on bounce election day tends to bring. But if markets continue to track their historical averages, we’re in for some volatile reversals today.

The US Dollar is pulling back on election day and the currency is no longer overbought on the daily chart. In this webinar I looked at several election-related setups and in this article I look at a few of those in USD, EUR/USD, USD/JPY and USD/CAD.

USD/JPY surged 10% off the yearly low with the bulls relenting at key resistance ahead of US elections / FOMC. Battle lines drawn on the short-term technical charts.

The EUR/USD has been supported in the last few days for several macro reasons such as the ECB pushback against a 50-basis point rate cut in December, a rather weak US jobs report, and, more to the point, the recent poll suggesting Harris might be performing better than anticipated in swing state of Iowa.

Gold, Oil Outlook: Following a period of geopolitical and USD-related uncertainty, gold’s uptrend has stalled below $2,800, while oil remains in a tight consolidation below $72. Markets are calm and appear poised for a potential spark.

The US dollar and yields have enjoyed a strong rally over the past five weeks, thanks to hotter US data, Fed members pushing back on rate cuts, and Trump leading in many polls. But with the US election on our doorstep and the potential for a delayed result, could this tie the Fed’s hands at this week’s meeting?