High Volatility Ahead

With the US presidential election coming closer, up for November 05, global banks come forward with their analysis concerning the most likely outcome if the market favorite Democrats win.

Asian shares remain bid, led by China, while heading into the European open on Monday. Although weekend headlines challenged Friday’s optimism, mainly due to the chatters surrounding the US coronavirus (COVID-19) stimulus, the People’s Bank of China (PBOC) managed to keep the market bulls happy.

 Here are the key market moving factors for the week:

The US

• House Speaker Nancy Pelosi and Senate Republicans on Saturday rejected President Donald Trump’s roughly $1.8 trillion stimulus proposal.
• Trump’s $1.8 trillion offer is a tad better than the $1.6 trillion aid package offered earlier this week but remains well below the $2.2 trillion in the bill House Democrats passed last week.
• The US dollar wallowed in two-week lows against its main peers amid dull trading as the American and Canadian markets are closed on Monday, in observance of Columbus Day and Thanksgiving Day respectively.

EUROPE

• The coronavirus resurgence in the Old continent is intensifying, with France having reported record-high new daily cases of about 27K on Saturday.
• In Spain, with Madrid under localized lockdowns, the regions of Catalonia and Navarre will tighten restrictions on working and public gatherings after the continued rise in COVID-19 cases.

The UK

• The UK Culture Secretary Oliver Dowden said on Monday, the new measures likely to be announced by the PM Boris Johnson later today are to get the coronavirus under control.
• Also, markets shrug-off rising virus cases in the UK. Stricter virus-led lockdown conditions are set to be announced by the PM for tier-3 hotspots.
• BOE Governor Andrew Bailey is due to speak at a virtual Citizens’ Panel Open Forum.

JAPAN

• It’s worth mentioning that Japan flashed mixed data concerning Machinery Orders and Producer Price Index, for August and September months respectively.
• Though, fears that the BOJ’s future exit from easy money will be too challenging for the markets seem to weigh on Japan’s Nikkei 225, down 0.30% intraday to 23,547 now.

AUSTRALIA

• Depending upon Australian Prime Minister Scott Morrison’s comments to the Seven Network, suggesting the opening of Aussie internal borders for the first time since March.
• While also allowing a quarantine free entry to visitors from New Zealand, the Pacific nation also south to ease the coronavirus (COVID-19) travel bubble with low-risk countries across Asia and the Pacific.
• Even so, the Aussie government keeps the travel restrictions for the European Union (EU) countries and the US while citing odds of it being unchanged till 2022.

CHINA

• The market sentiment remains buoyed by China’s fresh policy measures, deployed over the weekend, to curb the yuan appreciation while the country’s central bank set financial institutions free from the need to set aside cash when purchasing FX for clients through forwards.
• People’s Bank of China Vice Governor Fan was out on the wires Monday, citing the US and China’s deteriorating relations as huge risks to tech supply chain security for China’s financial network.
• On Saturday, Governor Yi Gang said that the central bank would not employ aggressive monetary easing policies implemented by the West and focus on the consumer price stability and exchange rates to help the economy recover.

Market Overview: 

Gold

• The price of gold trades to fresh monthly highs as growing speculation for another round of US fiscal stimulus drags on the Greenback, and the precious metal may continue to retrace the decline from the record high ($2075) as the Relative Strength Index (RSI) breaks out of the downward trend carried over from August.

Oil

• CME Group’s preliminary readings for crude oil futures markets noted open interest shrunk for the fourth consecutive session on Friday, this time by more than 9K contracts.
• Volume reversed four straight builds and diminished by around 362.8K contracts.

Below are the major market moving events for the week:

All times listed are EDT

Monday

Canadian markets closed for the Thanksgiving holiday.

Tuesday

5:00: Germany – ZEW Economic Sentiment: expected to decline to 74.0 from 77.4.

8:40: US – Core CPI: seen to drop to 0.2% MoM from 0.4%. 

Wednesday

5:00: Eurozone – Industrial Production: anticipated to have slipped to 0.7% from 4.1% previously.

8:30: US – PPI: likely edged down to 0.2% in September from 0.3%.

20:30: Australia – Employment Change: forecast to have slumped to -35.0K from 111.0K. 

Thursday

8:30: US – Initial Jobless Claims: printed last week at 840K.

8:30: US – Philadelphia Fed Manufacturing Index: expected to hold at 15.0.

11:00: US – Crude Oil Inventories: anticipated to plunge to 0.294M from 0.501M

Friday

5:00: Eurozone – CPI: predicted to remain flat at -0.3%.

8:30: US – Core Retail Sales: forecast to fall to 0.4% from 0.7%.

8:30: US – Retail Sales: probably held at 0.6%

Based on the above factors and the events lined up for the week, the analyst at RvR Ventures suggests you Trade responsibly; invest only as much as you can lose. All the profits and losses due to the above data are your own personal responsibility. Kindly practice money management & risk mitigation while trading.

Chat with us to know more: https://wa.me/971581958582

Register to open your account: http://bit.ly/OpenFxAccount

Join Our Telegram Channel: https://t.me/ForexFundManagers

Subscribe to Our YouTube Channel: https://youtu.be/AnTlQd-FQxc