Gold and silver prices are finishing the week on a somber, yet negative note thanks to some profit-taking after recent gains. All in all, the last 5 days were fairly lackluster and did not emit much in the way of markets-moving economic data. What we did receive, however, is some more news regarding the ramping up of easy money policies in Europe as the European Central Bank held their monthly meeting on Thursday.
Looking ahead, the marketplace is now concerning itself with this upcoming week’s FOMC meeting and any information that may bring with it. Of course, the number one concern for just about any investor is what will happen to interest rates, and when it will happen. At this juncture, we are no closer to knowing if and when rates will be hiked than we were 4 months ago. If anything, investors are even more confused now than they were before.
ECB Meeting Goes Off Without Much Alarm
Thursday’s Federal Open Market Committee Meeting is one that will surely catch the undivided attention of the marketplace, but this week investors had to settle for the latest batch of European news. The ECB met this week and, though they left policies unchanged, ECB president Mario Draghi alluded that further monetary stimulus may be on its way before the end of the year. Looking to fight off deflation and keep economic growth on track, most market experts now feel as though Draghi and his colleagues have no choice but to institute further stimulus measures.
In recent history, the data we have been receiving from the European marketplace has been less than stellar. In recent weeks, even data from Germany—long considered to be the strongest EU performer—has been far worse than what most people had been expecting. The allusion to further monetary stimulus on the part of Draghi forced the Euro currency to take a bit of a dip against its rivals, namely the US Dollar.
Light Week of US Economic Data
As for the batch of US economic data received this week, there wasn’t much in the way of markets-moving data offered. Thursday offered up the weekly jobless claims report for last week and the data did not offer much in the way of shocking information. Weekly claims for unemployment benefits fell about in line with expectations and did little to change the marketplace all that much.
In addition to that, data on the sales of existing homes during the month of September was upbeat for a twelfth straight month. Sales of previously owned homes shot up on annualized basis by more than 5% to bring the pace of sales to over 5.5 million on the year. Like touched upon already, sales of previously owned homes in the United States have been on the rise for the past year, which is a very positive sign for the economy. It shows that cheaper energy prices is leading to more expendable income which is, in turn, leading to an uptick in the purchase of big-ticket items such as houses and cars.
Despite US economic data being a bit on the poor side through most of October, it is still very clear to see that the US economy has come a long way from the financial crisis of 2008. Now, the focus of the marketplace turns to the FOMC meeting expected to be held over the course of Wednesday and Thursday of next week, culminating with the all-important post-meeting statement which is expected to be delivered by Fed chairperson Janet Yellen.