 There were some interesting turns in the financial markets last week. Global equities initially cheered after Democrats sealed a tremendous win in the US mid-term election by regaining majority in the House. But the lift quickly faded as stocks suffered quite notable setbacks towards Friday's close. It looked like US treasury yields are ready to resume recent up trend after FOMC statement, which did nothing to alter the expectation of a December hike. But yields then reversed on Friday and closed generally lower. In the currency markets, for the week, Australian and New Zealand Dollar were strongest, as initially lifted by rebound in Asian stocks. Aussie was supported by slightly more up beat RBA economic outlook. Kiwi was also additionally boosted by strong employment data. Sterling was the third strongest as there was some Brexit optimism. Canadian Dollar was the weakest as crude oil was in free fall. It's followed by Yen on risk appetite and Euro on Italian's budget showdown with EU. But, for Friday, Yen was clearly the strongest one, followed by Swiss Franc, as risk appetite receded. Dollar also extended post FOMC rebound. Sterling was the worst performing one after soft September GDP and the never ending Brexit impasse. Australian Dollar was the second weakest, followed by Canadian Dollar and then New Zealand Dollar. Friday's picture was in contrast with the weekly picture. Except that, Canadian Dollar was weak throughout. So, it looks like the markets, at least part of them, are turning around. |
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