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Daily Outlook – 8 Oct. 2020
By: Andria Pichidi
- Harris and Pence: Smooth debate but without any significant market reaction
- Trump indicated he would promptly sign a standalone stimulus bill, including $1,200 checks for individuals and relief for airlines and small businesses after he halted the negotiations with the Democrats on a bigger stimulus deal Tuesday.
- Pelosi: Democrats were willing to pass a standalone airline relief bill.
- Stock market sentiment across Asia and the US last night was supported by hopes of some targeted relief measures in the U.S. – USA100 is 1.7% firmer at session highs, the USA500 is up 1.4% and the USA30 has climbed 1.6%. GER30 and UK100 futures are up 0.5%.
- ECB contemplating an extension of the PEPP program as case numbers and with its restrictions continue to rise across Europe.
- RBNZ – “actively working on negative interest rates and a funding-for-lending program helped to lift spirits.
- BoJ’s Kuroda meanwhile said Japan’s economy remains in a severe situation, but added that things are starting to pick up. Against that background, Topix and Nikkei are currently up 0.63% and 0.99% respectively.
USD – mixed against majors
EUR – lifted slightly at 1.1776
GBP – retests R1 at 1.295 so softer dollar
JPY -steady, sideways in 106 low area
CAD – declined to 1.3235 from an overnight peak of 1.3340 even as crude oil
AUD – rallied to 0.7158 reversing more than 50% of 2-day losses
Oil – holds at low $40 area – defied inventories which showed a minor increase of 0.5 million barrels, worse than expected
Gold – holds below 1900, limited by the risk-on rally on stocks
TODAY: ECB’s Schnabel, BoE Bailey, SNB Jordan, BoC Macklem, ECB Merch, ECB Guindo are set to speak today. Also on tap are ECB Monetary Policy Meeting Accounts and US Jobless Claims
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