Despite – or perhaps because of – Jerome Powell failing to comment on monetary policy during his appearance in Boston, Dow Jones continued to fret over the likelihood of a rate cut this month.
Lingering on last Friday’s better than forecasts non-farm number, the Dow dropped another 100 points, leaving it back at 26700 for the first time in a week. Now, the index’s concerns probably shouldn’t be overstated. While it has lost 300 points in the last few sessions, it is still up 2000 points since the start of June, suggested that broadly investors are still expecting the Fed to slash rates in July, an expectation backed up by the CME Group’s FedWatch.
Nevertheless, with little else to preoccupy themselves with, the markets remained in the red. The FTSE slipped 20 points to sit at its own one-week low, with the CAC dipping 0.3%. The DAX, meanwhile, plunged 0.9%, the German bourse suffering from the substantial losses posted by the troubled Deutsche Bank (DE:DBKGn), and the profit-warning producing BASF.
Boris Johnson’s claim that October 31st needs to be treated as a ‘real deadline for leaving the EU, come what may’ has only further softened up sterling. Against the dollar it fell 0.4%, sending cable to levels last seen in spring 2017, while against the euro it lost 0.3%, forcing it to a fresh 6-month nadir. It’ll be interesting to see how much the currency reacts to this evening’s televised tête-à-tête between Johnson and Jeremy Hunt.
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