UNITED STATES November 01 2016 9:35 AM
NEW YORK (Scrap Register): Brown Brothers Harriman lists three factors likely to impact gold and US markets this week – political developments, a Federal Open Market Committee meeting that winds up Wednesday, and October nonfarm payrolls to be released Friday.
Gold and the other markets were roiled late Friday on news that the FBI was reopening an investigation into Democratic presidential candidate Hillary Clinton’s email issues. While a win by Republican Donald Trump in the presidential election seems unlikely, the impact on markets could be potentially huge, BBH added.
As was the case with the Brexit vote this summer, many insist that polls underestimate the strength of insurgency movements. Still, barring a specific ‘smoking gun,’ we do not expect the reopening of Clinton's email investigation to significantly alter voter preferences, they added.
Analysts say there is practically no chance of a Fed rate hike this week ahead of next week’s presidential election. Still, market participants will be watching for the Fed language and the number of dissents.
Meanwhile, the jobs tone often sets the tone for the month in markets. BBH expects job growth slowed a little, but it will not challenge the December hike scenario, especially if they are right about the FOMC guidance and the economic threshold. BBH expects that the proximity of full employment and the emerging skills shortage will see wage pressures continuing to increase.