The sharp rally on oil (likely short covering) has helped to improve sentiment, however the dollar is now coming under pressure as US economic data just begins to disappoint. We look at how this could impact on financial markets in the coming days. What are the key factors to watch that will affect forex, equities and commodities traders? UK inflation and wages, along with Eurozone growth are on the agenda.
Donald Trump firing someone should not be such a big deal. However, when he fires a man he has previously praised but has latterly been heading up an investigation into the President, it becomes an issue. The markets have been focusing on Trump firing FBI Director James Comey because it does far more than it first appears. Firstly, the investigation into Donald Trump’s potential involvement with the Russians during an election campaign that Russia has been accused of hacking into the emails of Hillary Clinton is ongoing. Comey’s sacking subsequently leads to serious questions over a potential cover up. Secondly and perhaps more importantly for financial markets, it just adds to the toxicity of the divide within Congress and poses further questions on the ability for Trump to get through his fiscal plans. Trump was an already polarising President and it has been claimed that he is having to learn on the job. However he is clearly learning pretty slowly that you cannot run the White House like a corporation. Trump claims to have sacked Comey due to his poor leadership and having lost the faith of those within FBI, a claim flatly denied by the now acting FBI Director Andrew McCabe. How does this impact on markets? Confidence is key, and the continued maverick/chaotic way that Trump runs his administration is worrying. Safe haven plays have started to rally and equities are wavering in their support, whilst the VIX last week under 10 surely shows complacency.