Key Points:

Cable breaks trendline as Brexit takes centre stage once again

US stocks close mixed but a quiet end to the week

Gold down $4 to $1941

A fairly quiet close to the end of last week after a volatile few days saw Nasdaq continue to remain under pressure closing just in the red whilst the Dow and to a lesser extent the S&P500 remained in positive territory for the day. During Fridays session we saw US CPI come in a little higher than expected at 1.3% from 1.2% expected but US yields didn’t budge and markets closed out with a whimper. Despite the volatility across risk assets last week a key note to the price action of AUD/JPY shows treading water hinting that not much has changed overall despite some corrective moves in tech stocks. Gold closed at $1941 approx $10 higher than where it closed at the end of last week along with most G10 not too much changed on the week with the exception of Cable that lost more than 2.5% due to ongoing Brexit tensions. Over the weekend we’ve had some nods to EUR strength from ECB’s Lagarde but most pairs are unchanged on the Asian open this morning. The main event this week will be the FOMC with recent comments suggesting no further stimulus for now. However, markets are still waiting to hear from the Fed how their new approach to inflation will be managed and this could cause some volatility. Having continually failed to meet inflation targets for 25 years they have a lot to answer for if they are to drive inflation towards 2%. Thursday could be the key turning point for the next move in the USD. No data of note for the upcoming session but Japan will have the LDP party election to replace Abe with Yoshihide Suga the expected new PM unlikely to cause any ripples. Expect a slow start to the week with eyes on UK/EU stand off and any political news from the US as we head towards the election.

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