It’s another day that continues to be dominated by worries about the speed of the recovery process in the global economy, additionally pressured by the ongoing energy crisis.
It will be a calm day in terms of fundamental reports, with nothing major on the radar. There are some balance of trade reports from Europe and speeches by representatives of the European Central Bank, the Bundesbank, and the Bank of England.
In the United States, there will also be speeches by several members of the Federal Reserve, as well as building permits and housing starts data for September.
Speaking of the Federal Reserve, it has its own fair share of troubles right now due to allegations of insider trading. Regional presidents Eric Rosengren and Robert Kaplan were already dismissed due to evidence that they were trading stocks last year.
Now it has come to light that the Chair of the Federal Reserve, Jerome Powell sold a substantial amount of stocks last year after he realized that then-President Trump would not heed the Fed’s advice for more stimulus. The following day there was a market crash in the US.
The Fed’s Vice-President, Richard Clarida, was also trading at the time. However, his term is coming to an end anyway.
As for Powell, he is currently trying to gather support to be chosen for a second term as Chair of the Federal Reserve. Some experts have stepped forward to explain that his actions were not unlawful, but even so, this incident could damage his reputation and prevent him from chairing the Federal Reserve again.
The US dollar has weakened for unrelated reasons. The reserve currency suffered a blow due to the disappointing industrial production data from the United States. This allowed commodities quoted in USD to strengthen. The rise is especially pronounced in industrial metals like nickel and copper, which have been performing quite well since the beginning of the year.
In addition, the weaker dollar, paired with the rising value of commodities such as crude oil and natural gas, have led to a strengthening in commodity currencies like the Canadian, Australian, and New Zealand dollars.
As for the stock market, today we anticipate that US indices will trade higher due to the ongoing earnings season. Companies that will report how they did in Q3 today include Johnson & Johnson and Netflix.
