Last quote by Lukman Otunuga
Lukman Otunuga quotes
While there still remains a cloud of uncertainty over how economic policy may change under Trump's presidency, the same rising optimism towards Trump boosting U.S. growth through tax cuts and infrastructure spending may have played a key part in the changes to the Fed's projections.
November's Trump effect still fuels the Dollar with optimism over Donald Trump implementing fiscal stimulus measures reinforcing expectations of an improvement in overall US GDP. A strong rise in inflation from healthy growth could force the Federal Reserve to raise US interest rates aggressively in an effort to prevent the economy from overheating.
The ever-rising expectations of the Federal Reserve raising US rates in December have left Gold extremely vulnerable to losses with the metal hovering around 10-month lows at $1170 as of writing.
The Euro continues to be battered by the painful combination of Eurozone growth concerns and fears of political instability in Italy. Tuesday's positive stance from the ECB pledging to buy more Italian bonds post Italian referendum did little to quell the downside pressures on the EURUSD with bears exploiting this opportunity to send prices lower.
Although Wall Street concluded last week near historical highs, losses could be realized if Asia's and Europe's bearish contagion contaminate American shares.
The heightened fears over diminishing Eurozone growth coupled with ongoing political instability in Europe have left the Euro extremely vulnerable to losses. Sentiment remains firmly bearish towards the EUR with steeper declines expected as speculators bet over the European Central Bank extending its QE program at December's policy meeting.
Speculation of a December rate hike reached mind-boggling levels.
With speculations mounting over Donald Trump cutting taxes and boosting infrastructure spending, the Fed may be forced to repeatedly raise US rates in 2017 in an effort to control inflation.
Dollar bullish investors stole the show during trading on Monday with the Dollar Index surging to eleven-month highs at 100.00 as expectations intensified over the Federal Reserve raising US interest rates in December. The Dollar's appreciation was complimented with optimism towards Trump's administration bolstering spending and reviving inflation, a move seen as supporting economic growth in the States.
In the aftermath of Trump's victory, expectations have already diminished over the Federal Reserve raising US interest rates in December with the current odds below 50% which should pressure prices further. Despite the sharp rebound, which has taken the Dollar Index back towards 97.65 as of writing, bears remain in control with the Index sinking towards 96.00 as speculators reduce bets on a US rate hike.
With the probability of a December rate hike currently standing around 70 percent, a breakout above 98.00 could open a path towards 99.00 and potentially higher.
The short-term gains seen in global stocks have been undeniably impressive but go against the fundamentals, which does raise questions about the sustainability of the current market rally.
Sentiment is very bearish towards the Japanese economy and expectations are mounting that another technical recession could be around the corner.
Although European and American equities may continue to enjoy short term gains, the factors which have left global stocks heavily depressed remain intact.
Investors must remember that oil prices are still painfully low, while concerns over the global economy remain elevated, which should weigh heavily on sentiment.
The odds are stacked against sterling bulls as domestic concerns around slowing wage growth and tepid inflation levels have pointed to a potential slowdown in economic momentum.
The heightened fears over the impact a Brexit could have in the UK, Europe, and global economy has renewed a wave of jitters that has weighed on global sentiment.
The violent swings in the oil markets, combined with ongoing concerns about the global economy, have reinstated a wave of risk aversion which continues to punish the FTSE 100.