In November, the following will be the main factors that will likely move the market.
USA Mid-Term Elections
Next week, United States will go through the mid-term elections. This will be an election to elect the congressmen and senators. Presently, the republicans hold the senate and the house. Investors will watch the race closely because of the impacts that it can have. A win by the republicans will mean status quo while a win by democrats may be big trouble for the Trump administration. This is because they may attempt to undo the work done by the president. They may also block any measures brought the president mostly on deregulation and tariffs.
For months, investors have been focused on the sanctions that the US placed on Iran after the Trump administration exited from the Iran deal. The tough sanctions imposed on Iran will kick off this month. While many countries may definitely cut the purchases, the concerns was that China may not collaborate. However, last month, the Chinese government directed the oil buying companies to halt the purchases. This means that the supply could be reduced. However, Saudi Arabia has pledged to increase supply of crude oil to prevent a shortfall.
In October, the crude oil inventories rose faster than traders had expected. This led to a sharp decline in the price of crude oil. In fact, it was the worst month in the crude market in more than 2 years. As mentioned above, the issue of supply will remain being very important in the new month.
Last month started with optimism about Brexit. There was hope that the UK and the EU would have an agreement about the remaining issues. These hopes disappeared mid last month when the two sides disagreed. This month starts with a high note. The UK’s Brexit minister announced that a deal was near. He predicted that the deal was likely to come mid-this month. This led to a sharp increase in the value of the sterling. This is because traders believe that a deal between the EU and the UK will prevent a so-called hard Brexit.
Later this month, the G20 meeting will happen in Argentina. This will be the first summit to be held in South America. The main issue during the meeting will be the summit between Donald Trump and Xi Jinping. The two leaders will meet to have a conversation about trade. The US has asked China to submit a list of concessions that the country will make. Without the list, the US will not meet with China. China has said that such a list exists but doubts the seriousness of the United States. A breakthrough in the meeting will be very important for the global trade that has faced a challenge this year.
As the final quarter goes on, traders will pay close attention to economic data. Most importantly, they will focus on the global growth story as well as the inflation in key countries. They will also focus on the Emerging Markets which has been under pressure because of the stronger dollar.