Buck is mixed as elections take main stage
The U.S. Dollar is trading in tight ranges as voting gets going across America while stock indices falter on fears that big earnings in the tech sector may be running out of steam.
After four years of a boom for artificial intelligence companies, expectations for earnings have climbed significantly, which has led to some disappointment. A gauge of U.S.-listed chipmaking firms reached a six-month low on Monday, tumbling by around 30.0% from a high in June. Meanwhile, investors are also cautious about what the results of midterm elections may translate into for markets as friction seems to be inevitable going forward.
FX moves have been limited, but it is worth noting that the People’s Bank of China intervened to curtail the Chinese Yuan’s (CNY) longest winning streak in thirty years. By asking banks to hold more foreign currencies in reserve, officials successfully ended a thirteen-day run of gains for the currency. While headlines will be focused on the potential for various outcomes, we will still pay attention to a few data points such as JOLTS job openings, quits, and layoffs for September, which come out at 10 a.m. Additionally, factory and durable goods orders will be released then.
What to Watch This Week…
- Euro-zone CPI, Wednesday
- US Nonfarm Payrolls, Friday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
GBP
Pound sterling is trading around its strongest levels since mid-September ahead of data on productivity tomorrow and the Bank of England’s policy announcement on Thursday. Tuesday will feature October Purchasing Managers’ Index figures, which could further establish the good economic situation in August and the three months prior according to Gross Domestic Product growth that came out in the middle of last month. “Cable” could be further boosted by the “hawkishness” expected from the Bank of England, with a 96.0% chance of a 25-basis-point hike. Any indication that a December move is also deemed appropriate could give the pound more reason to continue its advance.