Trump Rally Pauses; Focus Shifts to Dollar-Buying Momentum: U.S. and U.K. Policy Rates Key
The U.S. presidential election, concluded with Trump’s victory, sparked market enthusiasm, driving a “Trump trade” characterized by a strong dollar, rising stocks, and increasing U.S. bond yields. However, today saw a pullback in the dollar, suggesting a temporary pause in the Trump rally. Moving forward, markets will closely watch how Trump’s policies sustain dollar-buying momentum.
Today’s spotlight is on U.S. and U.K. policy rate announcements. The Bank of England’s MPC is expected to announce a 25bp rate cut, with attention on vote splits and Governor Bailey’s comments regarding potential further cuts. Similarly, the U.S. FOMC is also set to cut by 25bp, making Chairman Powell’s remarks crucial for future guidance.
Key Economic Indicators & Events Today
Key Economic Indicators:
- Germany Industrial Production Index (September)
- Germany Trade Balance (September)
- Eurozone Retail Sales (September)
- Sweden & Norway Central Bank Policy Rates
- U.S. Non-Farm Productivity Index (Q3 preliminary)
- U.S. Initial Jobless Claims (Oct 27 – Nov 2)
Notable Speeches:
- BoE Governor Bailey & Deputy Governor Ramsden
- U.S. Fed Chair Powell’s Press Conference
- ECB Officials’ Speeches and Event Appearances
Today’s Strategy
With a focus on U.S. and U.K. policy rate announcements, an unexpected result could trigger significant market fluctuations. Given the high volatility of the British pound, the approach will be to monitor movements closely following rate announcements and await market stabilization before considering entry.
