Skip to content

Interstellar Group

As a complicated financial trading product, contracts for difference (CFDs) have the high risk of rapid loss arising from its leverage feature. Most retail investor accounts recorded fund loss in contracts for differences. You should consider whether you have developed a full understanding about the operation rules of contracts for differences and whether you can bear the high risk of fund loss.    

Weekly Focus: Geopolitics takes centre stage

ISG
notice

We strongly suggest you to follow our marketing announcements

.right_news

A WORLD LEADER

IN FX & CFD TRADING

Market
News

24 hours global financial information and global market news

A WORLD LEADER

IN FX & CFD TRADING

Sponsorship &
Social Responsibility

InterStellar Group aims to establish itself as a formidable company with the power to make a positive impact on the world.
We are also committed to giving back to society, recognizing the value of every individual as an integral part of our global community.

A WORLD LEADER

IN FX & CFD TRADING

การสัมนาสดเกี่ยวกับฟอเร็กซ์

A WORLD LEADER

IN FX & CFD TRADING

12

2022-11

Date Icon
2022-11-12
Market Forecast
Weekly Focus: Geopolitics takes centre stage

The central bank 'pivot' narrative got a boost from US CPI inflation surprising on the downside, falling back to 7.7% in October amid easing core inflation pressures. Terminal rate expectations declined and markets are now pricing only a 50bp Fed hike in December, challenging our call of a 75bp increase. Equity markets rallied on the prospect of less Fed tightening and the roller-coaster moves in yields continued, with spread tightening also seen in European rates. Geopolitical headlines of Russia withdrawing from the city of Kherson added to the volatility, as did comments from a range of ECB members suggesting that the recession view is gaining ground, although in contrast to the Fed, with no slackening of the hiking pace yet in sight. The rally in Chinese equities got a boost from an easing of quarantine rules for travellers, but new infections have climbed higher especially in the manufacturing hub of Guangzhou. Commodity prices, including oil, rose more than 1% on the back of broad USD weakening. We remain sceptical that a turnaround in the strict zero-Covid stance is coming anytime soon, and continue to think EUR/USD will decline back below parity despite the most recent uptick.

As votes in the US midterm elections continue to be counted, the Republicans look likely to narrowly win the House of Representatives, but the anticipated 'Red Wave' did not materialise. Control of the Senate might not be known for weeks, as the race in Georgia goes to a December run-off. Overall, the market reaction was muted as little changes to fiscal policies are expected to result from the political gridlock, although we keep an eye on potential changes to US support for Ukraine and the upcoming debt ceiling discussions.

The EU Commission published a first proposal for overhauling the EU's fiscal rules, which would allow countries to agree more realistic debt-reduction paths with Brussels, while creating extra space for public investment. Enforcement would be tightened, with a stricter regime for countries that face 'substantial' public debt challenges, but an agreement before mid-2023 seems unlikely.

A busy week awaits on the geopolitical front, creating the backdrop for volatile markets. On Tuesday Indonesia will host the first G20 leaders' meeting after Russia's invasion of Ukraine. It has been confirmed that Russian President Putin will not attend in person, though he is planning a virtual participation in one of the meetings, in an encouraging sign that some level of dialogue between Western and Russian leaders continues. President Xi and Biden are also set to meet for their first face-to face meeting. Securing 'guardrails' on the Taiwan issue could be the most important topic, while we also look out for comments from Xi about his opposition to using nuclear weapons. In China we have a policy rate decision and a cut cannot be ruled out, as a range of 'hard data' will probably confirm that Covid uncertainty continues to dampen demand. In the UK, we look forward to the Chancellor's Autumn Statement on Thursday, where PM Sunak's government will spell out its fiscal plans. It is widely expected to include tax increases across the board to fill up the hole of approximately GBP 50bn in the UK's public finances, while October inflation numbers could take another big jump up. In the US, retail sales for October will reveal how well consumer spending is holding up amid high inflation.

Download The Full Weekly Focus

Latest
NEWS