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Original title: New crown nightmare fear of heavy attack? ! Global Risk Assets Have Sold Out Wildly, Trump Biden “Offer” Volume Today Gold priceOnce lost 1890
FX168 Financial News (Hong Kong) News Thursday (October 15) European trading hours, market sentiment deteriorated significantly, European equities plummeted across the board, US equity futures fell. There are a number of disturbing factors behind the new round of sales: the US stimulus plan has again been thwarted, the global situation of the new corona epidemic, especially in Europe, has deteriorated, recently They have suspended multiple vaccine trials and the uncertainty of the US elections Safe haven funds are rapidly flowing into the US dollar and US debt. As the US dollar is rising strongly, spot gold continues to hover around the 1900 mark, waiting for more catalysts.
There are signs today in European morning trading that risk appetite has weakened, but in the past two hours, this has turned into a large-scale sell-off, with major European stock indices falling by nearly 3% and a sell off US futures.
This is a typical hedging strategy. The funds flowed into the bond market. The 10-year US Treasury yield fell 3 basis points to 0.695% to a two-week low. The German 10-year Treasury yield fell 5 basis points to 0.627%, the biggest drop in more than a month.
Several influencing factors pointed out by market participants are: US economic stimulus negotiations have suffered another setback; the coronavirus epidemic in Europe and the UK has further deteriorated; recent news about the stagnation of vaccine and treatment trials; the uncertainty of the US elections is still approaching.
The nightmare may be repeated: the global epidemic of the new crown shows signs of deterioration
Recently, the new corona virus has intensified in Europe and overwhelmed authorities are faced with a nightmare situation when the virus strikes again.
As the Northern Hemisphere officially enters fall, the new corona pneumonia epidemic has launched a second wave of global offensive. Recently, European countries in the northern hemisphere have once again faced strong pressure on epidemic prevention and control.
The number of new cases per day in Europe has reached approximately 100,000, surpassing the United States, which has an average of more than 51,000 new cases per day.
The number of cases in France has increased rapidly. President Macron announced that starting Saturday, Paris and other major cities will implement a four-week curfew. Almost a third of the 67 million inhabitants of France will be affected.
The number of confirmed cases in a single day in Germany reached 6,638 in the early morning of October 15, the highest since the outbreak in Germany. German Chancellor Merkel said she and the leaders of the 16 German states agreed on Wednesday to take stricter measures, but did not elaborate. She said: “We have entered a stage of exponential growth, and the number of people every day has shown this situation.”
The Italian government has once again tightened the measures to prevent the epidemic, including the mandatory use of masks and the control of body temperature in public places and outdoors, companies open to the public must provide customers with disinfectant gel, etc. ., and the national emergency will continue until January 31, 2021.
British Prime Minister Johnson announced in Parliament on 12 October local time that the “three-tier epidemic alert system” had been launched. Based on the severity of the epidemic, various regions of the UK were divided into three tiers – medium risk, high risk and very high risk – and ordered the closure. Bars and pubs in Liverpool, a very high risk area.
The World Health Organization on Wednesday (October 14) warned countries not to settle for the status quo, stating that although the overall death rate from the new coronavirus has not changed much as the number of cases rises confirmed, the mortality rate will subsequently increase.
Frustrated US stimulus plan
Regarding the stalled stimulus plan negotiations, US Treasury Secretary Mnuchin admitted Wednesday that it would be difficult to reach an agreement before the elections.
Mnuchin told a meeting organized by the Milken Institute: “At present, considering our current progress and differences in details, it will be difficult to reach an agreement and implement it before the elections, but we will continue to work hard to solve these problems. .. “
Mnuchin stressed that to reach an agreement on a new rescue plan, Pelosi must agree to make concessions. He also believes that if the two sides cannot reach an agreement before the November presidential election, he hopes that Trump can win re-election and try to reach an agreement as soon as possible.
At the same time, a Pelosi spokesperson said Wednesday that House Speaker Pelosi had spoken with Mnuchin and will have another conversation on Thursday (3pm local time). The two sides had a “fruitful” discussion about the wording of the $ 1.8 trillion stimulus proposed by the White House last weekend, but the government’s lack of a national strategic monitoring plan remains a major disagreement.
“Optimism soared skyward last week, and now everything has fallen,” said Mike Zigmont, director of trade and research at Harvest Volatility Management. “I think the stimulus plan has been reflected in stock prices as a big macro event. It’s just a question of when the details will be released and when the stimulus measures will go into effect.”
Since negotiations to stimulate the economy cannot reach an agreement before the elections, the short-term focus after the elections will be mainly on the outcome of the elections so that the stimulus package can be passed smoothly after the elections. .
US elections are closing in on Trump Biden today
The United States presidential elections will be held on November 3. Today, less than 20 days before the general election, Biden’s approval rating in the polls has been significantly higher than Trump’s for several months. A new poll by the public opinion agency Opinium shows that Democratic candidate Biden outperformed Trump’s 40% by 57%. The difference between the two is 17 percentage points, which is quite large.
However, the Thomson Reuters / Ipsos poll shows that stagnation in some battlefield states may determine the winner.
On Thursday night local time, Trump and Democratic presidential candidate Biden will participate in city hall activities at the same time. Although they only compete in the air, they are expected to continue to create fierce sparks.
In the evening, Trump and Biden will participate in question-and-answer conferences hosted by the National Broadcasting Corporation (NBC) and American Broadcasting Corporation (ABC), respectively, to host an air contest.
NBC confirmed Monday that Trump Q&A will take place in Miami, Florida at 8 pm on the 15th. The public should take their body temperature before entering the venue, maintain social distancing and wear masks during the approximately one-hour event. . Previously, Biden had announced that he would participate in the ABC question and answer conference in Philadelphia. The activity also started at 8 pm and the question and answer process is expected to last 1.5 hours.
Strategists and fund managers said the market is beginning to digest the possibility of the Democratic Party winning the election.
Although many investors believe that Democratic candidate Biden is more likely to raise taxes, they are increasingly targeting the potential benefits of Biden’s presidency, such as higher spending on infrastructure and less global trade. Certainty.
At present, there are no exact data that can accurately explain the current decline, but it may be the result of the combined effect of these factors that led to a combination of profit-taking activities.
Some analysts pointed out that the rate of decline in risk assets today is a bit worrisome, but if this is mainly due to the frustration of stimulus measures, then this may be just a small episode in the whole process. However, if the market focus undergoes a major shift, especially if the number of new cases is refocused, then there may be deeper issues to worry about.
When risk sentiment was cooling largely, the US dollar gained favor with safe-haven funds. The US dollar index continued to rise on the day, and the current price is above the 93.70 mark.
Joseph Trevisani, Senior Analyst at FXStreet.com, said: “Currently, the US dollar is only fluctuating under the influence of the news of economic stimulus, and the fluctuations will not be small.”
At the same time, when the US dollar remained strong, spot gold took a hit and the price of gold fell sharply to the 1890 mark. However, a number of risk factors limited the fall in gold prices.
(Golden Day chart source: FX168)
Commerzbank (Commerzbank) said that the fall below the support level of the 1900 mark shows that the gold market has not yet been able to leave the area close to this level.
Citibank said it remains bullish on the short-term trend for gold and also has more positive expectations in the medium term. The bank expects the price of gold to rise to US $ 2,200 an ounce in the next 3 months and to US $ 2,400 an ounce in the next 6 to 12 months.
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