Bullet Report: Clinton emails shock markets, ahead of a key week in FX

Today marks the beginning of a very important week in the markets. Aside from 4 major Central Bank meetings (Australia, Japan, USA and UK) which are expected to keep rates unchanged, we also have the US non-farm payrolls. The USD is set to close the month as the strongest currency, followed by the Australian Dollar, whereas the Sterling is set to be the month’s biggest loser. Meanwhile, last week brought also an interesting shift in the expectations for the US Elections, as news hit that Hillary Clinton is again being investigated by the FBI, which saw US dollar and stock markets drop.

Currencies: Last Friday saw the USD reverse its gain versus most currencies, amid heightened political instability after the FBI revealed that more Clinton emails that were related to private use, will be investigated. The reason why the US dollar seems to drop on any news that supports a Donald Trump win is that there are expectations that Trump will change many things in American politics, including foreign policy, which could potentially isolate America from its trading partners and have an effect on exports. On a side note, US GDP released on Friday showed an increase at an annual rate of 2.9% beating expectations of a 2.5% rise only.

Stocks: US stocks dropped on Friday, following the release of the Clinton-FBI news. It is unclear how the latest news will influence the final result, although Clinton has lost a bit of her lead against Trump after Friday’s developments. Earnings will continue to play a big role in the market with 134 S&P 500 companies on tap to announce financial results. Today, APAC shares closed mostly higher and Europe has opened in also a positive note.

Oil and Gold: Oil prices have declined further, moving well below the $50 mark, as news that OPEC members are asking for exceptions from a supply cut, has seen investors scare off from the buy side of the trade. Last week, saw oil prices drop to the lowest level in nearly a month ($48.19), and the biggest weekly loss since September. Gold prices on the other hand have gotten a boost reaching as high as $1284 after investors flocked to the yellow metal following the fears over political instability that may rise after the Clinton accusations. Gold, always benefits in times of political instability, geopolitical tensions, and a weak Dollar.

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