background image

NY Open: Forget the midterms – it’s the FOMC that matters

Forex 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  The US interim elections are grabbing all the headlines though in reality, this week's Fed policy setting meeting is far more important for markets.


Financial markets are aflutter; flapping their wings and scurrying like a turkey a few days before Thanksgiving. Today’s US midterm elections are causing all the fuss and realistically, ”why care?” The world has seen dysfunctional American Congresses before and it didn’t stop turning. At best, the US political drama will be dialled back. Otherwise, it will be business as usual. Arguably, any market reaction will be knee-jerk, and short-lived. 

The Federal Open Market Committee meeting is what matters. Thursday’s policy statement is expected to repeat most of what was written on September 26. Rates will be left unchanged. The recent string of US data has been mixed to firm but not strong enough to spark another bump in rates. However, the statement could be hawkish enough to raise the odds of a December hike which are currently at 72.1%.

The US dollar has been on the defensive since the New York open. AUDUSD added to its gains after the Reserve Bank of Australia tweaked its growth forecast higher. Sterling has been the stand-out performer in a positive Brexit headline-fuelled rally. GBPUSD climbed from 1.3043 to 1.3094 but retreated to 1.3065 as of 14:00 GMT.  UK negotiator Dominic Raab gave a “thumbs up” signal when he left today’s cabinet meeting. His EU counterpart Michel Barnier said he couldn’t say that a deal was close. GBPJPY rallied from 142.85 to 148.24, but as long as prices are below the 14870-90 area, the downtrend from February remains intact.

Wall Street is trading in positive territory. The Nasdaq is leading the way with a 0.64% gain as of 14:00 GMT. Traders do not seem very interested in driving prices very far in either direction and today’s vote gives them the perfect excuse to book an early lunch.
GBPJPY, daily. Source: Saxo Bank

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.