31.10.2016 Daily Market Analysis

The US dollar (USD) posted mixed performance against major currencies as fresh political concerns hit the market on Friday.

The USD first gained as the US advance GDP figures came out better than expected at 2.9%. The previous figure was 1.4%, while Wall Street had modeled for an expansion of 2.5%. But reports that the FBI will reopen files on Hillary Clinton’s private email server case heightened uncertainty on the dollar later in the day. The markets have seemingly priced in a Clinton victory, and any news that brings uncertainty to that view will likely leave investors more anxious. With the elections happening in less than two weeks, more political headwinds will likely weigh in on the greenback.

Friday was a less volatile day but investors can expect more volatility in the markets this week as the US political situation enters final gear and with multiple economic events scheduled in the economic calendar. Central bankers will dominate the headlines starting on Tuesday as the Bank of Japan releases its monetary policy statement and the Bank of Canada’s Governor Poloz crosses the wires. The Reserve Bank of Australia will also release its Cash Rate as well as the Rate Statement.

On Wednesday, the US Federal Reserve Bank will release its Federal Funds rate as well as announce the FOMC statement, while the Reserve Bank of New Zealand will release quarter on quarter Inflation Expectations. On Thursday, the Bank of England will release its Inflation Report and Official MPC Bank Rate votes as well as announce its official Bank Rate. Then on Friday, the Reserve Bank of Australia will be the last to go again as its releases its Monetary Policy Statement before the Bank of Canada’s Poloz hits the wires again.

Aside from the Central Banks, there will be plenty of important news on the economic calendar this week. On Tuesday, China, UK and the US will all release Manufacturing data while New Zealand will release the all-important Global Dairy Trade price index. On Wednesday, the US will release Crude Oil Inventories and on Thursday, Australia will release its Trade Balance figures.

Finally, the all action week will culminate on Friday as the US releases its October Nonfarm Payrolls data.