German & New Zealand Elections this weekend, Theresa May speaks

September 22, 2017

It is shaping up to be quite a hectic finish to the week, with plenty of announcements as well as some significant events occurring around the world.

The USD weakened after the short post-Fed rally yesterday. The EUR/USD pairing jumped back into the mid $1.19 range as markets have completely digested the words of the Fed Reserve. It currently sits at $1.1947. The pound continues to dominate the USD, trading in the high $1.35 range. This could be as a result of talk that the UK may want to retain single market access with the EU. The GBP/USD pairing is currently at $1.3578. A speech by Theresa May (which is likely to occur later tonight) has the potential to move the pound, therefore, affect the pairing.

All three major US stocks finished lower overnight, as the post-Fed rally faded away. The Dow was the best of the worst, down 53.36 points (-0.24%) to 22,359.23. The S&P 500 retreated 7.64 points (-0.30%) to 2,500.60, while the NASDAQ was the worst performer, down 33.35 points (-0.52%) to finish the session at 6,422.69. European stocks were a mixed bag, the DAX up 30.86 points (+0.25%) to 12,600.03, while the FTSE ended slightly lower, shedding 8.05 points (-0.11%) to 7,263.90.

Gold continued its struggles as the Fed Reserve signals an interest rate hike in December. The tumble in gold prices has seen the precious metal fall back below the $1,300.00, where it presently sits at $1,295.00.

A big weekend coming up with the main talking point being the German elections to be held on Sunday. Current leader, Angela Merkel, is tipped to win re-election, but we know from recent history that elections can throw up some surprises. This election definitely has the potential to cause market volatility, so traders should be mindful of any open positions they have over the weekend that may be exposed to these market movements. The New Zealand election is also being held over the weekend. While there is far less potential to cause market volatility, it may affect traders that are trading a NZD pairing. UK PM Theresa May is also due to speak tonight. There has been talk that the UK may try to retain the single market access they had when the UK was a part of the EU. It will be interesting and significant to hear her comments tonight. ECB President, Mario Draghi, is also set to speak.

As for announcements, these include:

US – Flash Manufacturing & Services PMIs

UK – CBI Industrial Order Expectations

Canada – CPI, Common/Median/Trimmed & Core CPIs, Retail & Core Retail Sales

Europe – European, German & French Flash Manufacturing PMIs, European, German & French Flash Services PMIs, Belgian NBB Business Climate