Last week was a crossover between the month of October and November. The month started with optimism after Trump’s call with China’s Xi Jinping. There were also reports that Trump had asked his senior officials to draft a potential trade deal that will be signed by China. The two leaders will meet in Argentina later this month for the annual G20 meeting. Here are the biggest stories that traders will focus on this week.
US Mid-Term Elections
Tomorrow, the United States citizens will go to the polling stations to vote for their next congressional leaders. This will be an important election for a number of reasons. Historically, the incumbent president usually lose the members of his party during the mid-terms. If Trump is able to win back congress, it will likely be a sign that republicans love the style of his campaigns. Second, if democrats win the house and the senate, it will mean that the progress made by the Trump administration will be slowed. For example, Democrats have said that they will want to repeal the tax cuts passed by the Trump administration. Third, it will likely mean more legal trouble for the president at a time when Mueller is expected to release his report.
Today, the US re-imposed tough sanctions on Iran. This was after the Trump administration exited the Joint Comprehensive Plan of Action (JCPOA). The new sanctions bar Iran from engaging in the oil market trading. The US is able to do this because crude is usually traded in dollars. The decision by the administration hopes to curtail the Iranian government’s development of nuclear weapons. Trump hopes that the current regime will either fall or renegotiate the deal. He also hopes that other countries central to the Iran deal like EU and China will comply with the new sanctions. Already, China has directed its main oil buyers against buying Iran’s crude. Further, to avoid oil smuggling, the US has invested in complex satellite imagery and big data to catch oil tankers that cheat. In an interview last week, Iranian foreign minister said that his country will be affected economically by the sanctions.
The Fed will announce its interest rates decision on Thursday this week. For this meeting, the bank is not expected to make any adjustments in the interest rates. However, traders will pay close attention to the accompanying statement by the Fed on the future of rate hikes. This is important mostly because of the recent criticism by the US president and senior scholars who believe that the rate hike policy is not sustainable. While the latest economic data was positive, traders expect the growth to slow down.
This week, the earnings season will come to a close. To most traders, the season ended last week when Apple released its earnings report. This week, a number of key companies will announce their earnings. These are Altaba, Aviva, Bright House Financial, Chesapeake, and Mylan among others.
The post Week Ahead: What to Watch Out For This Week appeared first on Forex.Info.
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