Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
You can access both of our platforms from a single Saxo account.
NY Open: Forget the midterms – it’s the FOMC that matters
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.
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.
Latest Market Insights
Quarterly Outlook
-
-
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... -
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 ... -
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... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
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... -
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... -
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... -
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 ... -
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...