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Stocks pull back from record highs as Russia probe and Fed chair in focus

Summary:

  • Russia probe makes 1st charges
  • Next Fed chair expected to be announced on Thursday
  • German inflation misses forecasts; US comes in inline
  • Technical overview of the DE30 after ECB support the rally
  • Bitcoin remains above $6000 after posting all-time high

 

Donald Trump’s former campaign chair Paul Manafort has turned himself into the US FBI to face indictments as the special counsel investigation into Russia’s 2016 presidential election interference has quickly escalated. A second former Trump campaign aide, Rick Gates, has also been charged as the 6-month investigation led by special counsel Robert Mueller has finally provided a public glimpse into the probe

It has been widely reported that the US president Donald Trump is looking to announce his nomination for the next Fed chair at some point this week, and a White House spokesman has said that this will now happen on Thursday 2nd November. Powell remains a fairly strong favourite for the role and as such if he is nominated then the market reaction shouldn’t be too severe.

There have been two inflation readings released this afternoon with the German number coming in slightly disappointingly while the US was inline. Together this saw some selling back in the EURUSD in the early afternoon, but the cross recovered to trade at its highest level of the day around the European cash close. 

The German stock market is realizing a bullish scenario following the ECB meeting which left rates unchanged meaning the deposit rate remained below 0%. The bank also vowed to keep loose monetary policy as long as needed in order to bring back inflation on an appropriate track. As a result, the European stock markets could benefit from this decision therefore one may assume that the DE30 could reach as much as 15000 points.

Bitcoin traders have begun the new week in upbeat moods after the digital currency set its new all-time high on late Sunday. Bitcoin surged close to $6300 (the price quoted on xStation5 platform) before pulling back slightly on Monday morning but it’s remained elevated either way. The exact causes which could have fueled a rally seen over the weekend weren’t clear, however they may be related to a so-called fork which we wrote about more on Friday.

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