Geopolitical issues keep markets on edge

September 25, 2019

Plenty of data out today, but it is political issues that is dominating interest.

The USD weakened overnight, allowing paired currencies to add some value. The EURUSD began the day at $1.09925 and was flat early in the day, dipping to lows of $1.09831 mid-session. The euro bounced off those lows and rallied for most of the session thereafter, peaking at $1.10235 late in the day. It has come off those highs and is now trading at $1.10086. The GBPUSD has followed the same path as the euro after opening at $1.24323. The pound remained steady early in the day, bottoming-out at $1.24133 mid-session. It took off shortly afterwards however, hitting a high of $1.25028 late. It has dipped below $1.25 and is now trading at $1.24810.

The Dow turned negative overnight on the back of an announced impeachment inquiry into Donald Trump. The index opened at 27,034.55 and ticked up to a high of 27,130.27 early in the day. It gave up about half of those gains, then remained steady for several hours. Late trading saw the Dow fall to lows of 26,714.06 before a recovery of sorts ensued. It is currently trading at 26,890.06. The Dax turned negative fairly early in the session after opening at 12,380.29. The German index edged up to 12,394.16 in the opening hour before embarking on its slow slide down.  The losses accelerated late in the day as it hit lows of 12,226.35. It has come off those lows and is now trading at 12.266.86.

The day ahead is being dominated by geopolitical events in the US and UK. The Democrat party has announced an impeachment inquiry into Donald Trump amid claims he abused his power to gain a political advantage over one of his possible presidential opponents in 2020. Whether this has legs or is just another political ploy to undermine Trump’s re-election remains to be seen. Over in the UK and the Supreme Court has ruled that PM Boris Johnson’s suspension of parliament was unlawful. This has led to several politicians to call for Johnson resign amid accusations that he misled the Queen into his reasons for the suspension in the first place. Expect these issues to dominate headlines throughout the day.

Data published today includes:

Japan – BoJ Core CPI

UK – CBI Realised Sales, High Street Lending

NZ – Official Cash Rate, RBNZ Rate Statement

Europe – German GfK Consumer Climate, Credit Suisse Economic Expectations, SNB Quarterly Bulletin

US – Crude Oil Inventories, New Home Sales, FOMC Members Esther George and Charles Evans speak



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