U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
Dollar Holds Firm as Markets Weigh Warsh-Led Fed and Yen Weakness Ahead of Japan Election 
Asian Currencies Hold Firm as Dollar Rebounds on Fed Chair Nomination Hopes 
Fed Confirms Rate Meeting Schedule Despite Severe Winter Storm in Washington D.C. 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
Japan Election Poll Signals Landslide Win for Sanae Takaichi, Raising Fiscal Policy Concerns 
Starmer’s China Visit Highlights Western Balancing Act Amid U.S.-China Rivalry 
BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan 
As we head into 2019, the United States and its economy facing several key risks after a turbulent stock market in 2018. Let’s take a look at those key factors,
- One of the most important risks facing the USA is an economic slowdown. There have been signs since the end of the third quarter that after a stellar performance in 2017, and 2018, the U.S. may finally be losing some steam. So, the focus would be on whether the economy continues to grow stronger or slowdown accelerates. The outcome of this uncertainty would certainly influence USD the most, as the market is no longer pricing a hike single rate hike by the U.S. Federal Reserve in 2019. The economy would also impact stock prices via earnings.
- Another set of key risks specific to the United States is the domestic political turmoil. With the House of Representatives under control, the Democrats are likely to increase political attacks on president Trump as the Presidential campaign would gradually kick in. The U.S. economy is likely to face several prolonged shutdowns over the differences between the Democrats and President Trump. The current ongoing partial shutdown speaks for it, which is likely to last longer than previous shutdowns.
- The United States is also facing several geopolitical risks, and one needs to keep an eye on them; relations with Middle East after troops withdrawal from Syria, and Khashoggi murder allegedly involving Saudi crown prince Muhammad bin Salman; relationship with European Union over NATO payments and trade; relationship with China as the trade war intensifies.
The outcome of the above uncertainties would not only continue to influence the market but their outcome would be major movers.
