Political news is back driving markets at least until the FOMC today and ECB Thursday. Markets are waiting and the moods for buying more are razor thin, writes Bob Savage, CEO of Track Research.
The overnight price action was dominated by political news starting with Republican Senate candidate Roy Moore lost to Doug Jones in Alabama. Perhaps the result was expected by the pollsters, the 1.5% margin is razor thin like the Republican’s Senate control now of 51-49.
The Japanese yen (JPY/USD) gained immediately on the headlines as the risk rises that tax reform reconciliation has less time and less room for passage.
The German political situation was also under scrutiny Wednesday as the coalition talks with Merkel start today with talk of an optional deal – keeping the sustainability of the government in question and the process to a deal drawn out with some expecting it won’t follow until March.
In Italy, newspaper Il Messaggero claimed that Italian election date has been set for March 4, 2018. The newspaper expects the Chamber of Deputies and Senate to be dissolved around Dec. 28/29.
All of this puts politics back into the lexicon of driving markets at least until the FOMC today and ECB Thursday. Markets are waiting and the moods for buying more are razor thin.
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