© Reuters. 5 key factors for the markets on FridayInvesting.com – Here are the top five things you need to know in financial markets on Friday, October 20:
1. Yellen on deck after Trump meet
Federal Reserve chair Janet Yellen will deliver a speech titled “Monetary Policy Since the Financial Crisis” at the Herbert Stein Memorial Lecture in Washington on Friday at 7:30PM ET (23:30GMT).
Her comments will be monitored closely for any new insight on policy. Yellen has previously said that the Fed still intended to raise rates in December, despite the sluggish inflation outlook.
Yellen will also likely be asked about the meeting with U.S. President Donald Trump on Thursday in what was assumed to be last round of interviews among the candidates for the Fed chief position.
Politico reported Thursday that Trump was leaning toward Fed governor Jerome Powell to be the next head of the central bank, implying a continuation of the monetary authority’s current regime.
A White House official said Wednesday that the decision would be made in the “coming days” and the President is widely expected to formalize the announcement before heading to Asia on November 3.
2. Senate budget approval pushes dollar higher
The U.S. Senate approved a budget blueprint for the 2018 fiscal year that will pave the way for Republicans to pursue a tax-cut package without Democratic support.
By a 51-to-49 vote, the Republican-controlled Senate voted for the budget measure late on Thursday, which would add up to $1.5 trillion to the federal deficit over the next decade in order to pay for proposed tax cuts.
The news pushed the dollar higher against major rivals on Friday. At 6:00AM ET (10:00GMT), the , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.39% at 93.36.
3. Global stocks celebrate U.S. tax optimism
Global stocks traded mostly higher on Friday after the news that the U.S. Senate had passed the budget, stoking optimism that the tax reforms were on the way.
U.S. futures pointed to a higher open as the week winds down and investors looked forward to earnings from General Electric (NYSE:), speeches from Yellen and Cleveland Fed president Loretta Mester and the release of September existing home sales. At 6:01AM ET (10:01GMT), the blue-chip gained 20 points, or 0.40%, rose 6 points, or 0.23%, while the traded up 12 points, or 0.19%.
Elsewhere, European stocks traded broadly higher on Friday as a batch of positive earnings reports supported sentiment. However, Spanish stocks remained under pressure ahead of a special cabinet meeting on Saturday which could see Spain suspending Catalonia’s autonomy.
Earlier, Asian equities were mostly higher on Friday, though Japan’s showed caution over elections on Sunday.
4. Oil sees profit-taking ahead of U.S. shale data
Crude oil prices saw profit-taking on Friday as traders opted to take profits after two weeks of gains.
A weekly report from the Energy Information Administration released Wednesday showed U.S. gasoline stockpiles rose for a fourth straight week while supplies of distillates – the class of fuels that includes diesel and – increased for the first time since August.
However, suggestions the OPEC may extend the global supply-cut agreement deal helped to support prices this week.
Market participants will keep an eye on increasing U.S. shale production when Baker Hughes releases its most recent later on Friday.
fell 1.05% to $50.75 at 6:02AM ET (10:02GMT), while traded down 0.87% to $56.73.
5. Japan heads to the polls on Sunday
Japan heads to the polls on October 22 with surveys suggesting that current Prime Minister Shinzo Abe to achieve a landslide victory.
Abe called early elections, which could allow him to continue his leadership until 2021, in order to solidify his position and may cement his proposals to change the constitution and move forward with a sales tax increase.
However, Japanese investors remained cautious in equities as the country’s proportional voting system has scope to throw up a surprise.
Source: Investing.com
