Fundamental Analysis 2017.09.07 – U.S. Debt Ceiling Deal Moves Markets

The markets responded like a disturbed bee hive to barrage of last minute news including the resignation of Fed Vice Chair Stanley Fischer and an unforeseen hike of interest rate by Canada’s central bank. These weren’t the only red-flags that caused investors to sell-off the US currency, but Hurricane Irma, a three month extension of the United State’s debt ceiling and the continuing friction between the US and N. Korea also had a contributing factor.

The Fed’s Vice Chair departure is more significant than its superficial impact on the organization of the central bank. This might contribute to the lengthening of the Fed’s transitional period as Janet Yellen’s term as Head Chair of the FOMC is coming to an end. This is likely to cause volatility for the USD.

Today’s agenda has investors looking towards Europe, with the ECB meeting and monetary policy statement scheduled for 12.30 GMT. That isn’t the only fundamental data slated to be released though – the EU’s Gross Domestic Product both quarter to quarter and year to year will be released at 09.00 GMT, the EU’s Deposit Rate Decision and Interest Rate Decision at 11.45 GMT culminating at the release of the ECB’s decision at 12.30 GMT.

The big winners seem to be Asian Shares as they climbed after the news that the US raised their debt ceiling until the December.

Oil prices went down slightly as more and more Gulf Region refineries resume activity. Brent at the time of writing this analysis is at 53.98 and WTI is at 49.16.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

STO Review