Last week , The Federal Reserve put last year’s aggressive rate raising policy to bed for the next six months as they wait to see how the economy performs. Concerns around growth over the next few months are growing, following thelongest shutdown in US history along with fears that inflation may be slowing down. However the jobs market is looking incredibly strong, as last week’s Non-farm pay rolls revealed a boost of 300,000 - double the expected in January. The Chairman of the Reserve Bank Jerome Powell has suggested that the Fed want to try to resolve the debt in the US before any more increases to the interest rate, citing concerns with how consumers will fair when they have even more interest to pay back.
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There are positive whispers coming out of the US-China trade talks, as it appears there has been progress in the latest round of talks. Whilst it doesn’t appear to have had too much influence on the GBP/EUR this year, the talks are thought to be progressing. This in my opinion is proven by positive murmurs from the Chinese side as well as a lack of negative remarks being made by US Government members, which goes to show that there could slowly be progress coming along.
There is currently a tariff truce in place which will be lifted come the 2nd March, therefore the talks could well be completed by then or the truce will be extended. Alternatively there is always a chance that things could take a turn, with so many volatile characters in the talks.
Tomorrow afternoon the latest non-manufacturing Purchasing Managers Index (PMI) data will be released. There is expected to be a slight decrease in the reading from the previous month, however the expected level of 57.1 is considered very positive. There isn’t much more expected until the end of the week with the Baker Hughes Oil Rig Count on Friday. This can sometimes spook markets depending on how many new rigs are built and especially lately with a major over supply of oil, there is always a chance for volatility. Make sure you’re in contact with your broker if you do have an upcoming transfer to discuss your options.
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