The Week Ahead
It looks like we could experience a week of two halves for traders this week with little fresh news out
over the weekend and a relatively quiet data calendar for the first few days. However, from mid-
week expect things to heat up as we hear from first the Fed and then from the Bank of England. As
always, the Fed will be the main headline act and investors will be looking any action or change of
rhetoric from them to give the markets their next push.
Key Macro Factors This Week
Fed Meeting: The key focus of this week will undoubtedly be the latter end of Wednesdays
trading session when the Fed announces its latest rate decision and gives us its view on the
market, this forward guidance could be crucial for the dollars medium term future. Expect
the dollar to take another step down if we get further indication of a move to negative rates
stateside, although the risk and it’s probably a long one is sitting with a more positive Fed
assessment of the economy and a less dovish message.
US Politics and Election: The race for the white house continues to heat up and with
President Trump likely to increase nationalistic rhetoric, expect more volatility to hit
markets. Relations with China are one of the Presidents favourite topics which can hit
markets sharply and a further deterioration of US-Sino relations will drive more haven
Bank of England Meeting: Although lacking the global influence of the Fed, this weeks BOE
meeting should see some volatility hit the UK markets. Brexit is once again high on the
agenda and Covid numbers are on the increase again in the UK so markets are expecting
more dovish comments from the governor with rates to remain unchanged. Anything
contrary to market expectation will see the pound move sharply both against the greenback
and on the crosses.