Smooth debate

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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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