Interest rate unlikely to change in November

Posted 08 November, 2018

The market is no longer focused on the election issue in the USA. Thus, risk aversion activities are fading away as well. Last week, second-tier currencies, including Indian rupee, South African rand, Turkish lira and Chilean peso enjoyed good demand. At present, the markets include a possible increase in the interest rate in South Africa that can take place this month driven by increasing inflation. As a result, the rand has got a driver for an upturn. Meanwhile, traders are careful about the observed upturn as they are not sure in the fundamentals. The markets reportedly plan to see balanced conditions once Donald Trump agrees upon monetary and fiscal softening. As the market expert noted, the event-trigger risks are likely to be low in 2019, and the global economic slowdown is already in the outlook. Stock prices may keep rising, while the greenback may move downwards.

At the same time, the US Federal Reserve will most likely leave the interest rate unchanged after a this-week meeting. As a result, the rate will still be 2.00-2.25%, which in tandem with no scheduled press conference today will result in a moderate response of the markets. Meantime in Europe, the Europea Commission is about to announce the 2019 economic outlook which will cover the budget deficit in Italy to exceed Rome's assessment. Switzerland reduced the unemployment rate to 2.4%, and if Donald Trump switches to softer trade policy, Switzerland can record faster economic upturn and the Central Bank may consider revision of the interest rate before expectations.

Previous forecast

09 November, 2018 16:55

← Bearish trend gathers pace in oil market

Prices for oil slumped on Thursday, with Brent oil hitting the August bottom of 70.55/bbl. Bearish sentiments were fueled by soaring US Dollar after the bullish rhetorics of the US Federal Reserve. Additional pressure is said to come from weaker demand in the world amid global economic slowdown. Bulls can just expect that OPEC+ exporters will support the market during the upcoming meeting in Abu Dhabi. The oil organization may give a clear sign that everything is under their control as well as express readiness to limit oil production to prevent the oversupply.

Bearish trend gathers pace in oil market

Next forecast

07 November, 2018 14:11

Oil market suffers from negative reports →

The oil market was full of negative reports over the past day – prices plunged below the 72 handle for the first time since late August, hitting $71.15/bbl. However, the rates somewhat managed to offset daily decline over Tuesday. Nevertheless, the quotes stay generally weak. Extra pressure also came from the outlook released by the US Department of Energy, which upgraded the outlook of oil extraction in the USA by 1.5% and 2.6% for 2018-2019 respectively.

Oil market suffers from negative reports
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