Interest Rates Abound as Election Time Looms

By Pete Southern in LiveWire Economics Blog | November 1, 2016 11:57 | Tags: , , , ,

As we move ever closer to the US election, what more could you ask for than a week packed with highly anticipated economic data? Expect Gold and stock indices to be volatile as we move into the second half of the week. Here’s a quick rundown of what’s about to land.

Already, as of Tuesday November 1st we’ve had BoJ and Australian interest rate announcements. The Bank of Japan held their already negative rate at -0.10%, and Australia remained unchanged at 1.5%.

The Australian Dollar headed straight up towards October highs against the US Dollar on the decision that matched forecasts, whilst USDJPY was static in comparison.

Tomorrow, Wednesday 2nd November, we’ve the big event. All eyes will be focused on the Federal Funds Rate in the USA. It’s been 11 months since they hiked the rate for the first time in years. Whilst it’s widely forecast to remain unchanged maybe there’s a surprise in store?

Gold has been creeping up slowly during the last few trading days, which seems to suggest traders are betting on the forecast of “no change” holding true.

Thursday 3rd of November is the United Kingdom’s turn. At midday UK time the Bank of England drops its monthly rate decision, again it’s expected to be unchanged at 0.25%. The rate was lowered in August as the uncertainty of Brexit hit hard on the Pound. Alongside the BoE rate, they also publish their inflation report. All in all it should be a volatile time for traders of GBP.

If all this is not enough for you, then make time for Friday’s Non-Farm Payroll data in the USA. It’s always a big market mover, and probably even more so after the Fed reporting in the same week.

Forecasts are that the figure will increase by 20k on the month however it missed, and fell by near 20k last month, so another miss may be the trigger to cause some volatile swings on stock indices.

This sets us up nicely for the ride into election time, November 8th. By the back end of next week we should know who will be the leader for the next 4 years. This in itself will probably cause major volatility, as it’s been the most unusual election in most peoples living memory.

Pete Southern About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.

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