US-China Trade Headlines Drive Markets
Markets are driven by trade headlines of the ongoing US-China negotiations. This time, a bid tone strengthened, making the stocks and futures to recover some losses. Bloomberg reported that the US is planning to enter into a currency agreement with China, which could pave the way for broader negotiations. Further, the New York Times reported that the Trump administration is planning to issue licenses that would allow some US companies to supply products to China’s Huawei.
After having losses yesterday, the US dollar gained due to the rising optimism of a positive outcome at the US-China trade talks starting today. Overnight, the FOMC meeting minutes almost went unnoticed. Chief Powell said that the Fed will soon start expanding its balance sheet again. He noted that he hadn’t ruled out another interest rate cut this year but stressed that the Fed would be data-led. The general view that the US economy is doing well while headwinds come from abroad prevails. Consumer Price Index (CPI) figures for September will be closely watched later today.
In the Brexit front, UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar will meet later today to try to find a solution that keeps the Irish border open while taking the UK out of the single market and the EU. The market is fully focused on Brexit and will likely ignore the UK GDP figures since investors are more worried about a disorderly no-deal Brexit.
NOTE: Traders are advised to be cautious and be updated on the major economic news causing high volatility to achieve better trading results.
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