US Elections, Brexit, NFP – 07 Nov 2016

US Elections, Brexit, NFP – 07 Nov 2016


US elections remain the only thing that can continue to drive markets at the moment lower or higher. The result of US elections can change a strong bullish trend in stock market that has been built the last eight years. Market will continue to move exclusively on US elections expectations. When we got an important event ahead even the more significant macroeconomic announcements do not matter at all. What it really matters is breaking news about WikiLeaks, FBI announcements, polls and any other potential revelations about Clinton and Trump past.

We see that market recently reacted aggressively to important news that can change the major trend and cannot be predicted in any case. Last week came the UK Court decision that forces Brexit vote to pass from Parliament. This change fulfil expectations that many politicians can change opinion and vote against Brexit despite British people decision. While yesterday another decision from the chief of FBI who decided to clear Clinton in a half page statement few hours markets open. Is very important at this level to keep our trading system to a short period timeframe and have the ability to show great flexibility on breaking news.

Despite yesterday’s night FBI statement that clears Clinton’s from a possible prosecution over email case and the risk on euphoria that followed by the markets we continue to see high probabilities that D Trump can be elected. The recent failure of pollsters to predict Brexit, 2014 Congressional results give us the right to appear at least skeptical about polls. There is an increasing popularity for Donald Trump and a lot of disappointment and anger for the current ‘establishment’.

The current NFP was strong enough in order to keep Fed warm for a hike soon. The most important number was the average hourly earnings which had a significant increase and rose speculations that inflation is moving higher. Low participate rate once more continue to give arguments about the weak status of the US economy.

We recommend extra attention for tomorrow in Florida which will give the first final results about US elections and is a key state.

Key Points:

• Fed’s Fischer: Labor market close to full employment
• Yen has gained 16% this year
• Corbyn says he won’t block Brexit
• 38% of small business owners feel ‘very concerned’ about election
• German factory orders plunged unexpectedly

Daily Economic calendar:
Country Event Importance Previous Expectations Follow Times
Germany German Factory Orders m/m High 0.9 0.2 -0.6 9:00

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