Trump’s Victory Fuels Market Rally Amidst Anticipated Rate Cuts

Hello traders, and welcome to this Thursday session, which promises to be eventful with significant market-moving events on the horizon. The macroeconomic calendar is packed with two anticipated interest rate cuts — one from the UK and another from the US. These decisions will undoubtedly be the focal points of the day and could trigger substantial market volatility.

Beyond the rate cuts, the global market landscape is still processing the aftermath of Donald Trump’s recent electoral victory. Known for stirring economic optimism, Trump’s win has reignited bullish sentiment across many asset classes. This effect mirrors what we saw during his previous election victory, when markets surged on expectations of business-friendly policies. As a result, indices in the US are reaching new all-time highs, showcasing investor confidence. Conversely, European markets aren’t basking in the same glow. Germany, in particular, faces turmoil as its government teeters on the edge of instability — a situation exacerbated by Trump’s policies that are perceived as unfavorable to European and Chinese trade relations.

In the currency market, the Australian and New Zealand dollars are showing strength, bolstered by China’s robust October trade surplus. This positive data from China supports these commodity-linked currencies. Meanwhile, the British pound is also on the rise, likely gearing up for the UK’s upcoming rate cut. The Canadian dollar maintains steady ground, while the American dollar, Swiss franc, and euro are experiencing ongoing weakness, especially as they brace for policy shifts in the US.

Turning to commodities, oil is making an attempt at a bullish reversal after a period of softness. Metals, on the other hand, are continuing their bearish correction, highlighting a divergence in commodity trends.

As we gear up for the pivotal interest rate decisions, traders should be prepared for increased volatility, particularly with the British pound and the US dollar in focus. While the market does not anticipate surprises in these rate cuts, reactions can still be pronounced as investors digest the broader economic implications.

Source: https://www.axiory.com/analytics/market-news/trump-s-victory-fuels-market-rally-amidst-anticipa