A Potholed Encumbered Landscape

Dean Popplewell profile picture
Dean Popplewell

By Stephen Innes

Market sentiment: risky business

US politics is back in forefront Tuesday, adding more spice and another air of unpredictability to the mix as markets continued their tenuous voyage through a potholed encumbered landscape, dealing with the fragile US-China relations book, Italy and Brexit developments providing more ambiguity. And if you add the IMF slashing global growth forecast to the fray, although this news was leaked and widely expected, it is no wonder investors have a high degree of misgivings.

Politics back in the fray: odd timing

On the political front, Nikki Haley's resignation has come as a bit of a shock which sent the USD temporarily lower as markets saw her as a voice of reason within the US administration where it sometimes appears gut feel or Twitter tirades drive foreign policy. Of course, something is very very odd about this significant departure ahead of US midterms, which has some pointing to her as the "senior administration official" who penned the op-ed New York Times article. So there we have it the first crack leading up to the contentious US midterm election, in what is likely to be a plethora of fissures to navigate.

Speaking of cracks, closer to home in two of the world's hottest property markets. Bloomberg reports there have been protests by homebuyers in China after developers discounted apartments during holiday sales last week, while CLSA says banks in Hong Kong are cutting valuations, threatening to fuel a downward spiral in prices.

US Bond Markets: valuations vs. sentiment

On the US bond market front, word from the futures "pits" is there's enormous momentum building that could move the yield thermometers higher by at least another ten basis points in 10Y USTs. But 10-y and 30-y yields retraced overnight as traders bought back shorts, but multi-year levels of significance remain

This article was written by

Dean Popplewell profile picture
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.

Recommended For You


To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.