Daily Alert: Thursday 3rd November 2016

Mark NugentDaily Alert, Nov 2016

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Forex Analysis for Thursday 3rd November 2016
Economic Calendar

US election (ZeroHedge)

• Latest Hampton University poll showed Donald Trump ahead by 3 points in Virginia at 44% vs. 41% which is the first time he is ahead in that state (same poll gave Hillary Clinton a 12-point lead a few weeks ago). (Newswires)
• Virginia is a key swing state in which neither candidate has a clear lead. However, it is not one of the big four: Iowa, North Carolina, Ohio or Florida – which analysts think Trump must win to be given the keys to the Oval Office.
• Before this poll hit the wires, Fox News’ Brett Baier said FBI sources think the Clinton foundation case is moving towards a possible indictment.
• These two stories in conjunction caused risk averse sentiment in Asia, with safe have flows into JPY, USTs and spot gold alongside softness in equities and the USD.

Fed (ZeroHedge)

• The FOMC kept rates unchanged at 0.25-0.50% as expected; with George and Mester the dissenters. (Rosengren no longer a dissenter)
• The FOMC stated that the case for a rate hike has continued to strengthen but have decided to wait for the time being for some further evidence.
• The FOMC repeated that they view inflation to rise to their 2% target over the medium term but dropped the reference to inflation expected to stay low in the near term.
• No noticeable reaction across major US asset classes.

UK Construction PMI beat expectations (52.6 vs 51.9).

Market Reaction

Another day of falling US equities on Clinton’s multiple woes. Both UK indices and the Euro50 down as well, as is Japan and Australia. WTI drops further to below USD46/bbl. The USD index falls again and the JPY strengthens on safe haven flows. CAD drops on oil price. The GBP continues sideways.

Media

Carney’s Brexit dilemma shifts to faster growth and inflation

Today

REMINDER: UK High Court is to decide at 1000GMT whether goverment can invoke Article 50 without MP’s approval. (BBC)

UK Services PMI; Bank of England Super Thursday and US ISM Non-Manufacturing PMI.

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