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Original title: Decision analysis: Trump is discharged from the hospital and returns to the White House, a new round of online electoral debates is considered, the dollar falls and US stocks rise.
FX168 Financial News (North America) News On Monday (Oct 5), the safe haven currency, the US dollar, fell and riskier currencies performed outstandingly. Investors were optimistic that the US Congress would agree to new stimulus measures to mitigate the coronavirus impact of the virus on the economy. At the same time, investors await the latest news on the severity of the symptoms of the new coronavirus in US President Trump.
On Monday, the stock market was hoping to stimulate the economy and Trump said it would rise after being released from the hospital, which was the fourth day he received treatment for the virus.
Trump left Walter Reed National Military Medical Center late Monday to return to the White House, where he will continue to receive treatment for the coronavirus, and hopes to restart his re-election campaign.
The New York Times quoted two people familiar with the matter who reported that the upcoming election debate between US President Trump and Democratic candidate Biden is considering an online format, and the debate committee is discussing this. The online format is just one of the options for discussion. The discussion is currently in its preliminary stages, and the committee is unlikely to determine the final plan before the end of this week’s debate on the vice presidential candidates.
“I think the market believes that as the data continues to show that the US economy is slowing down, fiscal stimulus measures will become a reality sooner or later,” said Joe Manimbo, senior market analyst at Western United Business Solutions. .
White House Chief of Staff Meadows voiced support for this optimism. He said it is still possible for lawmakers in Washington to agree on more economic relief, and Trump is committed to reaching a deal.
However, if a deal cannot be reached, it can be good for the dollar. American market late,Dollar indexTo close at 93.44, down 0.43%, the intraday high reached 93.88, the lowest at 93.37.
“We believe the prospects for reaching a stimulus plan before the election remain very low,” said Erik Nelson, a macro strategist at Wells Fargo Bank in New York.
He said: “We believe we should curb the current weakness of the dollar, especially relative toThe Norwegian crownorAustralian dollarAs riskier currencies. “
The Federal Reserve will release the minutes of the September meeting on Wednesday and the European Central Bank will publish the latest minutes of the meeting on Thursday.
Spot gold closed at $ 1912.24 an ounce, an increase of $ 13.84 or 0.73%, reaching the highest level since September 22 at $ 1918.40 an ounce and the lowest at 1886 , $ 20 an ounce.
After US House Speaker Pelosi made optimistic remarks over the weekend, he began to show optimism about the fiscal stimulus package. Pelosi said the bailout bill is moving forward.
Daniel Pavilonis, senior market strategist at RJO Futures, said: “Perhaps there will be a small transaction that Pelosi and the Republican Party will agree to in the future. I think the stimulus plan will be beneficial for the metal.
Pavilonis said risk appetite is not good for gold and said “it could be on the side again this week.”
After Trump was diagnosed with a new coronary pneumonia, his condition continued to improve, along with the hope that America’s new bailout plan would progress, American stocks rose.
The Dow Jones index closed up 465.80 points, or 1.68%, at 28,148.64 points; the S&P 500 index closed up 60.20 points, or 1.80%, at 3,408.62 points, which was the first time since September 15 to close above 3,400 points; Nasdaq Composite The index closed 257.50 points, or 2.32%, higher at 11,332.49 points.
Goldman Sachs also believes that the blue wave represented by the Democrats is sweeping, that is, Biden can completely control the government and the House of Representatives, which will arrive in November, which can be beneficial for the American economy.
Goldman Sachs economist Jan Hatzius wrote in a report to clients that day: “All things being equal, such a blue wave may lead us to raise our forecast. The reason is that in January Biden shortly after taking office the 20, the likelihood that a fiscal stimulus plan of at least US $ 2 trillion will pass will increase significantly, followed by increases in long-term infrastructure construction, weather, healthcare and education. Match the increases. of long-term taxes for high-income people. ”Hatzius estimates that such a fiscal stimulus package can boost economic growth in 2021 by two to three percentage points.
Assuming the Fed keeps interest rates unchanged until the economy reaches full employment and the inflation rate is slightly above 2%, “we estimate that the net effect of the package (from Biden) will be a positive boost to production. economic and a contribution to basic personal consumption expenditures (PCE) A new boost to inflation, ”explained Goldman Sachs.
However, the impact of this blue wave on US stocks is in fact “mixed” because Biden advocates raising the corporate income tax rate from 21% to 28%. On the positive side, investors should expect a blue wave to produce the following results: “US fiscal policy is looser, the risk of improving trade is reduced, and global growth prospects are stronger,” Goldman concluded Sachs.
Focus and weather vane for the next trading day:
11:30 AM Reserve Bank of Australia Announces Interest Rate Resolution
16:35 The president of the European Central Bank, Lagarde, gave a speech
8:30 PM August US Trade Account
21:00 The president of the European Central Bank, Lagarde, participates in the debate
10:40 PM Federal Reserve Chairman Powell delivers a speech
24:00 Federal Reserve Hack gave a speech
24:00 EIA Announces Monthly Report on Short-Term Energy Outlook
China’s Shanghai and Shenzhen Stock Exchange, Shanghai Futures Exchange, Shanghai Finance Exchange, etc. are closed for one day
04:30 the next day US crude inventory API for the week of October 2
Analysis of the main currencies:
EUR: The euro / dollar rose and closed at 1.1781, an increase of 0.58%. Technically, the initial resistance for the bullish exchange rate is at 1.1817, the additional resistance is at 1.1854 and the key resistance is at 1.1910; Initial support for the exchange rate on the downside is at 1.1725, additional support is at 1.1668, and the most critical support is at 1.1632.
GBPGBP / USD rose for the second day in a row, closing at 1.2976, an increase of 0.35%. Technically, initial resistance for the bullish exchange rate is at 1.3010, additional resistance is at 1.3046 and key resistance is at 1.3102; Initial support for the exchange rate on the downside is at 1.2918, additional support is at 1.2862, and the most critical support is at 1.2826.
Japanese Yen: USD / JPY appeared and closed at 105.72, an increase of 0.37%. Technically, the initial resistance for the bullish exchange rate is at 105.94, the additional resistance is at 106.13 and the key resistance is at 106.48; Initial support for the downward exchange rate is at 105.39, additional support is at 105.05, and the most critical support is at 104.85.
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