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Articles
Look-ahead to the Federal Reserve meeting
By David Morrison | 13/12/2017 08:49
Rate hike expected
Later this evening the US Federal Reserve is expected to raise its fed funds rate by 25 basis points, taking it up into the 1.25-1.50% band. If done, this will be the third rate hike this year and the fifth since December 2015 when the fed funds rate stood at an all-time record low of 0.00 – 0.25%. A rate rise tonight will also take fed funds to its highest level in over nine years. Yesterday the CME’s FedWatch Tool (which uses the fed funds futures market to measure the likelihood of impending rate changes) calculated an 87% probability of a 25 basis point rate hike. This was down from 98% a few weeks earlier, but still clearly shows that most investors expect the US central bank to tighten monetary policy once again.
Non-Farm Payrolls: good enough
Last week’s Non-Farm Payroll report helped to boost the prospect of a rate hike. With a reading of 228,000 the headline number came in well above the 198,000 expected. The Unemployment Rate was unchanged from the previous month at 4.1% - matching the lowest reading since December 2001 – and effectively indicating that the US has reached a state of “maximum employment.” This should be something of a red flag for the Federal Open Market Committee (FOMC) as it points to tightness in the labour market. Theory says that the prospect of demands for higher wages should push inflation higher. This has led some analysts to worry that the Fed is “behind the curve” in keeping monetary policy too loose for too long. However, Average Hourly Earnings continue to indicate that there’s no real upward wage pressure in the US. Last week they rose just 0.2% from the month before, undershooting the +0.3% anticipated.
Inflation below target
In fact, the last update on Core PCE (the Fed’s preferred inflation measure) showed a year-on-year increase of only 1.4% - well below the central bank’s 2% target. This represented a modest improvement from September but is still well below the +1.8% hit back in March this year. Core PCE features prominently in the Fed’s decision process when it comes to monetary policy as maintaining price stability is one part of the Fed’s dual mandate.
“Dot Plot” in focus
Crucially, this week’s Fed meeting also brings a quarterly update to the FOMC’s Summary of Economic Projections. The summary includes the committee’s forecasts for unemployment, GDP growth, inflation and the Fed funds rate – the latter expressed visually in the “dot plot”. September’s dot plot suggested that the FOMC anticipated 75 basis points-worth of rate rises throughout 2018. The big question now, and perhaps the key factor in the FOMC’s summary, is if this remains the case. Third quarter US economic growth rose 3.3% from the year before and, as noted earlier, unemployment is at its lowest level since the beginning of this century. Wage growth remains sticky. But there are plenty of analysts who believe the Fed will look past this and look to tighten monetary policy more aggressively next year than previously forecast.
Watch the dollar
Consequently, there has been speculation that the FOMC may lean towards 100 basis points-worth of rate hikes next year. If so, then we should see the dollar strengthen – at least in the short-term. Conversely, if the FOMC sticks with last quarter’s preference for three 25 basis point rate hikes in 2018, then, other factors being equal, we shouldn’t be surprised to see the dollar pull back a touch from current levels.
Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and GKFX accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.
Author's Other Opinion & Analysis
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The week ahead
By David Morrison | 08/02/2019 13:23
Growth and inflation data
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S&P breaks winning streak
By David Morrison | 07/02/2019 13:24
Lower US open in prospect
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Gold isn’t the only precious metal to shine
By David Morrison | 06/02/2019 12:55
Silver in focus
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Strong US Payrolls and Manufacturing
By David Morrison | 04/02/2019 15:22
Investors confused after solid data
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Non-Farm Payrolls
By David Morrison | 01/02/2019 14:09
Another blow-out number
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Non-Farm Payroll look-ahead
By David Morrison | 31/01/2019 16:00
Data dump
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All eyes on the Fed
By David Morrison | 30/01/2019 15:29
First FOMC meeting of 2019
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S&P rangebound
By David Morrison | 29/01/2019 15:41
Hovering within an important area
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Federal Reserve, Earnings and Non-Farm Payrolls
By David Morrison | 28/01/2019 15:46
Busy week ahead
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Crude oil rangebound
By David Morrison | 25/01/2019 15:09
Venezuela in focus
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Draghi warns on growth
By David Morrison | 24/01/2019 15:23
Downside risks
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Equities bounce back
By David Morrison | 23/01/2019 15:57
US leads recovery
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Chinese growth slows
By David Morrison | 21/01/2019 15:27
Volumes light on US holiday
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Global indices storm higher
By David Morrison | 18/01/2019 15:22
S&P 500 cracks through resistance
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Netflix reports after the bell
By David Morrison | 17/01/2019 15:43
Equity rally continues
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UK Government faces confidence vote
By David Morrison | 16/01/2019 15:56
Sterling steady
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Corporate earnings in focus
By David Morrison | 15/01/2019 16:05
US banks disappoint
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Dollar spikes higher
By David Morrison | 11/01/2019 15:52
EURUSD falls back below 1.1500
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EURUSD slips after strong gains
By David Morrison | 10/01/2019 16:08
Dollar in focus ahead of Powell speech
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US/China to release trade statement
By David Morrison | 09/01/2019 16:09
High hopes for agreement
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Market Update
By David Morrison | 08/01/2019 16:02
US/China trade talks extended
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Powell responds to market volatility
By David Morrison | 07/01/2019 15:49
Fed Chair turns dovish
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China, Payrolls, Powell trigger equity rally
By David Morrison | 04/01/2019 15:53
Indices surge ahead of weekend
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Apple triggers further selling
By David Morrison | 03/01/2019 15:36
Turmoil in FX overnight
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Dollar strong as 2019 gets underway
By David Morrison | 02/01/2019 15:42
Gold also in demand
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Fed meeting in focus
By David Morrison | 19/12/2018 15:05
Hike or a pause?
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Crude oil sell-off continues
By David Morrison | 18/12/2018 15:55
WTI breaks below $50
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Updated chart of S&P 500
By David Morrison | 17/12/2018 15:55
Friday’s sell-off extended
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May vote and ECB in focus
By David Morrison | 12/12/2018 15:09
UK Prime Minister faces vote of ‘no confidence’
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US/China tariff news spurs equity rally
By David Morrison | 11/12/2018 15:40
Global indices reverse sharply
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UK government delays Brexit vote
By David Morrison | 10/12/2018 15:54
PM May ducks vote
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Crude prices under pressure
By David Morrison | 04/12/2018 16:09
OPEC meeting looms
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Stock indices gap higher
By David Morrison | 03/12/2018 15:34
Central bankers and payroll data
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Markets jittery as G20 convenes
By David Morrison | 30/11/2018 15:39
US and China delegations to talk on trade
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Powell speech sends equities soaring
By David Morrison | 29/11/2018 16:08
Fed chief interpreted as dovish
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Trump sounds off
By David Morrison | 28/11/2018 15:46
Fed Chairman to speak
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Trump’s trade comments
By David Morrison | 27/11/2018 16:11
Tension builds ahead of G20
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Equities bounce back
By David Morrison | 26/11/2018 15:53
Italy backing down?
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Weakness into the weekend
By David Morrison | 23/11/2018 14:19
Poor European data
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Thanksgiving drift
By David Morrison | 22/11/2018 16:00
Equities slip in quiet holiday trade
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US indices give back early gains
By David Morrison | 22/11/2018 09:12
Pre-holiday bounce evaporates
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Global stock indices recover
By David Morrison | 21/11/2018 15:38
Pre-holiday bounce
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Equity sell-off accelerates
By David Morrison | 20/11/2018 16:02
Retail follows tech down
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US and China disagree
By David Morrison | 19/11/2018 15:37
Problems ahead?
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Is sentiment souring?
By David Morrison | 16/11/2018 15:36
Looking for reasons to buy equities
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The dollar, the euro and sterling
By David Morrison | 15/11/2018 15:39
Sterling plunges on Brexit May-hem
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Crude oil bounces
By David Morrison | 14/11/2018 15:35
Output cuts being considered
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Crude oil slumps
By David Morrison | 13/11/2018 16:02
Slide continues
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An update on the S&P
By David Morrison | 12/11/2018 15:38
Bulls versus bears
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S&P chart and the week ahead
By David Morrison | 09/11/2018 15:24
Watch tonight’s close
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A look at the EURUSD
By David Morrison | 08/11/2018 15:49
Charts conflicted?
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Fed meeting in focus
By David Morrison | 07/11/2018 15:53
US dollar slips after mid-terms
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Markets quiet ahead of US election
By David Morrison | 06/11/2018 15:16
Mid-terms loom
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NFPs and the week ahead
By David Morrison | 02/11/2018 15:29
Blow-out jobs report
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Non-Farm Payroll look-ahead
By David Morrison | 01/11/2018 15:38
Wage growth in focus
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Update on the S&P 500
By David Morrison | 29/10/2018 15:57
Index whipsaws higher
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Rally runs out of steam
By David Morrison | 26/10/2018 14:24
Traders dump tech stocks
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Global stock indices bounce
By David Morrison | 25/10/2018 15:06
Traders ‘buy the dip’
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EURUSD under pressure
By David Morrison | 24/10/2018 14:45
Breaks below 1.1400
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Equity sell-off gathers pace
By David Morrison | 23/10/2018 14:54
US no longer immune
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Big week for earnings
By David Morrison | 22/10/2018 14:50
Investors hoping for boost
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The week ahead
By David Morrison | 19/10/2018 12:48
Earnings, the ECB and US GDP
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Chinese yuan falls again
By David Morrison | 18/10/2018 15:08
USDCNY highest since Jan 2017
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The week ahead
By David Morrison | 16/10/2018 14:19
What’s in store for the rest of the week
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Gold breaks above $1,200
By David Morrison | 15/10/2018 15:00
Regaining ‘safe-haven’ status?
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Buy the dip?
By David Morrison | 12/10/2018 15:10
Stocks rebound into weekend
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Euro feeling the heat
By David Morrison | 09/10/2018 14:30
Single currency busts below support
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S&P 500 tests support
By David Morrison | 08/10/2018 15:02
Investors remain cautious
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Investors getting nervous
By David Morrison | 05/10/2018 14:38
US Treasuries slump
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Italy tempers deficit plan
By David Morrison | 03/10/2018 14:53
The euro rallied today, along with European stock indices
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EURUSD testing support
By David Morrison | 02/10/2018 14:20
Single currency under pressure
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Goodbye NAFTA, hello USMCA!
By David Morrison | 01/10/2018 14:30
Canada joins US/Mexican trade deal
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Central bank meetings in focus
By David Morrison | 12/09/2018 15:12
ECB and BoE meet on Thursday
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German DAX continues to struggle
By David Morrison | 11/09/2018 15:09
Another support level broken
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Market Round-up
By David Morrison | 24/08/2018 13:44
Longest-ever US bull market
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Longest ever US bull market?
By David Morrison | 22/08/2018 15:01
US equities remain in favour
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Focus on Jackson Hole
By David Morrison | 21/08/2018 14:47
Fed Chair speaks on Friday
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S&P 500 backs away from record highs
By David Morrison | 16/08/2018 15:04
US equities not immune from emerging market contagion
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The 'never-ending' slide in gold
By David Morrison | 14/08/2018 14:59
Gold breaks below $1,200
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S&P 500 closes in on record high
By David Morrison | 08/08/2018 15:11
US equities continue to strengthen
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EURUSD bounces off 1.1500
By David Morrison | 07/08/2018 14:40
EURUSD retests support
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Weekly Market Wrap
By David Morrison | 03/08/2018 14:17
The second quarter earnings season is beginning to wind down
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Non-Farm Payroll look-ahead
By David Morrison | 02/08/2018 15:11
Payrolls expected to grow by 190,000
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Bank of England rate decision
By David Morrison | 01/08/2018 13:43
Rate hike expected
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Fed meeting look-ahead
By David Morrison | 31/07/2018 15:00
Fed expected to keep rates unchanged
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Weekly Market Wrap
By David Morrison | 27/07/2018 13:37
This article looks ahead to next week’s earnings, central bank meetings and data releases
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A pause in gold’s decline
By David Morrison | 25/07/2018 14:58
Overall trend still negative
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S&P 500 holding above 2,800
By David Morrison | 24/07/2018 14:53
Retest of highs in prospect?
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Crude steadies after slump
By David Morrison | 12/07/2018 14:00
Trade fears trigger selling cascade
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Gold threatens to break December lows
By David Morrison | 11/07/2018 14:27
Gold under pressure
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US S&P 500 retests resistance
By David Morrison | 10/07/2018 14:44
Investors shrug off tariff concerns
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Weekly look-ahead
By David Morrison | 06/07/2018 14:24
Weekly Market Wrap
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FOMC minutes and Non-Farm Payroll look-ahead
By David Morrison | 05/07/2018 13:07
US employment update this Friday
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Crude pulls back from multi-year highs
By David Morrison | 04/07/2018 15:06
Saudi Arabia prepared to raise output
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Investors relaxed over impending tariffs
By David Morrison | 03/07/2018 14:19
Dollar slips and stock indices rally
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S&P 500 retests support
By David Morrison | 02/07/2018 15:22
Equity markets under pressure
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No respite for Sterling
By David Morrison | 28/06/2018 15:32
Pound under pressure
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EU Summit and the single currency
By David Morrison | 27/06/2018 15:23
Euro under pressure
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Investors react to fears of trade tariff escalation
By David Morrison | 26/06/2018 15:32
Monday saw significant selling across global equity markets
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Weekly Market Wrap
By David Morrison | 15/06/2018 15:22
There was a broad-based sell-off across risk assets on Friday
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Traders turn to the ECB
By David Morrison | 14/06/2018 07:31
Expectations have risen that the ECB will talk of ending QE
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Federal Reserve set to raise rates
By David Morrison | 12/06/2018 14:55
The Fed concludes its two-day FOMC meeting on Wednesday
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Weekly market wrap
By David Morrison | 08/06/2018 15:22
Next week sees central bank meetings for the US, Euro zone and Japan
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WTI breaks below trend-line
By David Morrison | 05/06/2018 15:30
Both Brent and WTI crude have sold off sharply
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Weekly market wrap
By David Morrison | 01/06/2018 14:29
Friday’s Non-Farm Payroll number was much stronger than expected
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Non-Farm Payroll look-ahead
By David Morrison | 31/05/2018 15:42
This Friday sees the release of US Non-Farm Payrolls for May
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Weekly look-ahead
By David Morrison | 25/05/2018 15:10
It’s a holiday-shortened week with Bank Holidays on Monday for both the UK and US
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EURUSD update
By David Morrison | 23/05/2018 15:20
The EURUSD currency pair took another lurch lower today
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Weekly Market Wrap
By David Morrison | 18/05/2018 15:26
Traders are keeping a close eye on oil prices, the dollar and US Treasury bonds
-
Gold under pressure
By David Morrison | 16/05/2018 13:58
Gold had shown remarkable resilience over the past few weeks
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Weekly Market Wrap
By David Morrison | 11/05/2018 15:04
Equities rallied last week
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Bank of England rate decision
By David Morrison | 09/05/2018 14:59
A look at Thursday's MPC rate decision
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Weekly Market Wrap
By David Morrison | 04/05/2018 15:21
Friday brought the release of the latest US Non-Farm Payroll report
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Dollar break-out
By David Morrison | 02/05/2018 08:12
Early last week the dollar broke out of several trading ranges
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Weekly market wrap
By David Morrison | 27/04/2018 15:13
The yield on the benchmark 10-year Treasury note broke above the significant 3.0% level
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Crude weaker, but still near highs
By David Morrison | 25/04/2018 15:32
Oil fell yesterday following comments from French President Emmanuel Macron
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US dollar breaks out
By David Morrison | 24/04/2018 15:55
Yesterday evening the Dollar Index broke above 90.00
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Weekly market wrap
By David Morrison | 20/04/2018 15:06
Earnings continue to get a boost on...
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Another look at the EURUSD
By David Morrison | 18/04/2018 15:06
Trump accuses China and Russia of “playing the currency devaluation game”.
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S&P 500 update
By David Morrison | 17/04/2018 15:53
The US stock market steadied last week
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Weekly market wrap
By David Morrison | 13/04/2018 15:19
The first quarter earnings season got underway last week
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EURUSD update
By David Morrison | 11/04/2018 08:14
Still range-bound near highs
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Weekly market wrap
By David Morrison | 06/04/2018 15:29
US payrolls disappoint
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Non-Farm Payroll look-ahead
By David Morrison | 05/04/2018 13:48
Tomorrow sees the latest update for arguably the most important, and potentially market-moving, global data release – US Non-Farm Payrolls.
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S&P 500 update
By David Morrison | 04/04/2018 14:31
S&P 500 breaks below 200-day moving average
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Weekly market wrap
By David Morrison | 29/03/2018 13:38
This Easter holiday couldn’t really come at a worse time
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S&P 500 - update
By David Morrison | 27/03/2018 13:47
The S&P since February's sell-off
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Weekly look-ahead
By David Morrison | 23/03/2018 16:59
Holiday-shortened week
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NASDAQ leads sell-off
By David Morrison | 22/03/2018 15:53
Markets lead lower by tech sell-off
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Fed meeting in focus
By David Morrison | 21/03/2018 10:50
Investors on edge ahead of Fed decision
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Weekly Outlook
By David Morrison | 16/03/2018 15:41
Fed meeting in focus
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S&P 500 - the technical picture
By David Morrison | 14/03/2018 16:34
This week has seen the US majors pull back from their best levels
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Weekly look-ahead
By David Morrison | 09/03/2018 16:16
The headline payroll number smashed above the high end of expectations
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Non-Farm Payroll look-ahead
By David Morrison | 08/03/2018 14:30
All eyes on wage growth
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ECB and BOJ meetings in focus
By David Morrison | 07/03/2018 17:24
Investors experienced a shock last month
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Weekly Outlook
By David Morrison | 05/03/2018 10:15
This is a big week for financial markets
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Euro bounces, but political uncertainty remains
By David Morrison | 02/03/2018 11:01
The euro rallied sharply overnight
-
Weekly look-ahead
By David Morrison | 23/02/2018 16:58
US stock index futures were pushing higher ahead of Friday’s US open.
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FOMC minutes and the German DAX
By David Morrison | 22/02/2018 14:33
Investors were initially wrong-footed by minutes from a Federal Reserve meeting.
-
FOMC minutes in focus
By David Morrison | 21/02/2018 11:47
All eyes are on the release of minutes from the Fed’s January FOMC meeting
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Situation remains unresolved
By David Morrison | 20/02/2018 13:09
The stock market correction may have further to go
-
Weekly Outlook
By David Morrison | 16/02/2018 16:02
Global stock indices fought back last week
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Out of the woods? Perhaps not
By David Morrison | 15/02/2018 13:37
Yesterday brought the latest update on US inflation
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Inflation and the S&P 500
By David Morrison | 12/02/2018 16:30
This article will focus on the S&P 500
-
Weekly Outlook
By David Morrison | 09/02/2018 16:35
Friday was a roller-coaster session to round off a tumultuous week.
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What now?
By David Morrison | 08/02/2018 15:54
The current sell-off in global equities has been a long time coming.
-
Traders focus on volatility
By David Morrison | 06/02/2018 16:55
Yesterday the Dow posted its biggest ever one-day loss in points terms
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Rising yields lift troubled dollar
By David Morrison | 05/02/2018 16:17
The US dollar stages a modest recovery.
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Weekly look-ahead
By David Morrison | 02/02/2018 16:12
Equity sell-off resumes while dollar rallies
-
Time for a correction?
By David Morrison | 31/01/2018 16:22
Equities retreat as yields push higher
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Crude prices dip
By David Morrison | 29/01/2018 15:57
Oil slides as dollar rallies
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Weekly look-ahead
By David Morrison | 26/01/2018 15:16
What's in store for key markets
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Dollar hits fresh 3-year lows
By David Morrison | 24/01/2018 16:38
US dollar plunges ahead of Trump's Davos speech
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Wall Street hits fresh highs
By David Morrison | 23/01/2018 15:46
The three-day US government shutdown ended on Monday
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Market Round-up
By David Morrison | 22/01/2018 16:53
Monday marked day three of the US government shutdown.
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Weekly look-ahead
By David Morrison | 19/01/2018 16:30
The last couple of weeks have seen a number of significant technical breakouts
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S&P 500 – Weekly Chart
By David Morrison | 18/01/2018 15:24
Putting price action into context
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Crude pulls back from three-year highs
By David Morrison | 17/01/2018 16:32
On Monday WTI and Brent hit their highest levels since early December 2014
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Gold, the dollar, bond yields and inflation
By David Morrison | 16/01/2018 15:00
But in line with conventional wisdom the dollar’s sell-off triggered a sharp rally in gold.
-
Weekly look-ahead
By David Morrison | 12/01/2018 16:50
Earlier in the week the US majors had a slight wobble
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Gold traders eyeing the dollar
By David Morrison | 11/01/2018 15:48
This article considers the recent price action on gold
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Chinese news rattles markets
By David Morrison | 10/01/2018 15:33
Chinese officials recommend “slowing or halting”
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Could stocks rally further?
By David Morrison | 08/01/2018 17:00
Most European stock indices ended Monday’s session in positive territory, playing catch-up after Wall Street’s sharp rally last week.
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Weekly look-ahead
By David Morrison | 05/01/2018 15:55
We rounded off this week with the final Non-Farm Payroll report of 2017. Headline payrolls rose 148,000 which was well below the 190,000 increase expected.
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Dow smashes through 25,000
By David Morrison | 04/01/2018 16:07
Yesterday the US majors ended at fresh all-time highs and this helped to lift Asian Pacific indices overnight.
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US indices hit fresh record highs
By David Morrison | 03/01/2018 16:08
US stock indices made another strong upside move yesterday which took both the S&P 500 and NASDAQ Composite up to fresh record highs. The buying has continued throughout today’s session
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Mixed start to New Year
By David Morrison | 02/01/2018 16:56
The first trading day of 2018 brought a mixed session as far as global stock indices were concerned.
-
New Year round-up
By David Morrison | 29/12/2017 15:22
As 2017 draws to a close, here’s a quick round-up of how a few key markets look going into next year.
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What's Next for Crude Oil?
By David Morrison | 19/12/2017 14:42
This article will focus on price action in the front month WTI contract rather than Brent. WTI tends to provide better technical signals than Brent – not always, but often enough to give a cleaner overall picture.
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Equities soar on US tax reform hopes
By David Morrison | 18/12/2017 16:10
US and European stock indices soared on Monday as investors priced in an increasing probability that President Trump will deliver on his promise of tax reform before year-end.
-
Weekly Outlook
By David Morrison | 15/12/2017 14:26
Here’s a brief heads-up for the week beginning 18th December
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Central Bank monetary policy meetings
By David Morrison | 14/12/2017 15:48
Here’s a quick rundown of the highlights from this week’s monetary policy meetings from the European Central Bank, Bank of England and US Federal Reserve
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Cboe launches Bitcoin futures
By David Morrison | 11/12/2017 16:26
Listing Bitcoin futures on mainstream exchanges should ultimately help to boost the digital currency’s legitimacy and lead to more widespread acceptance.
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Non-Farm Payroll look-ahead: 6 things you should know
By David Morrison | 08/12/2017 09:55
So, here’s what to look for: the consensus expectation is for the headline Non-Farm Payrolls to rise 200,000 in November.
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EURUSD – key events to consider
By David Morrison | 06/12/2017 17:07
The dollar got a boost this week on the increased likelihood of an agreement on US tax reform being reached before the year-end.
Market Insight
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