Thursday Market Snapshot
WTI Crude Oil
Although the Federal Reserve is expected to keep its benchmark rates unchanged today following three tightening steps so far this year, financial markets are virtually unchanged across assets classes before the central bank rate decision and monetary statement.
Risk assets celebrated the end of the pre-election uncertainty yesterday, despite the fact that the midterms resulted in a legislative gridlock, with especially US stocks gaining ground and recovering another part of the October selloff.
The USD/JPY has been very strong in recent days amid the risk rally and despite the broad Dollar pullback, and it’s now very close to its early October high. The Greenback’s strength compared to the most important safe-haven currency underlines the extent of the bullish forces behind the Dollar’s rally, as it has been able to gain ground against all of the majors despite the different market environments.
While currently, the USD is well below its highs against the some of the China-related currencies, thanks to the trade-related optimism, the Dollar bull is well and alive in our opinion. Until a marked slowdown the US economy, we could see further highs in the Dollar index, in spite of the cyclical corrections against some of its peers.
VIX Plunges Below 17, but Oil Fails To Join Rally
The US Volatility Index (VIX) fell below the crucial 17 level that we pointed out this weekend, and that also points further gains in US stocks for the coming days,