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Original title: Worries are growing stronger! Market underestimates the possibility of Trump’s victory and beware of a repeat of 2016 Gold priceLost 1900
FX168 Financial News (Hong Kong) News Tuesday (Oct 27) European market risk sentiment remained sluggish, European equities almost fell across the board, the epidemic and the uncertainty of the US elections led to a feeling of caution. The US dollar picked up safe-haven buying and once again moved above the 93 mark. A stronger US dollar put more pressure on gold. The price of gold completely gave up its intraday gains and continued to fall below the 1900 mark. From the perspective of this trading day, the market has no important data to release, and we can pay attention to the performance of US stocks. In addition, the US elections and the development of the epidemic still affect the nerves of the market.
US stocks began trading this week with a sharp decline this week. The general tone of the market is pessimistic. Both the epidemic and the US stimulus plan have unsettled the market. Furthermore, with the approaching US elections, panic began to mount and the demand for coverage increased.
From today’s point of view, the US dollar is more favored by safe haven funds. The US Dollar Index once fell below the 93 mark in one day. However, with the resurgence of safe haven purchases in the European market, the US index returned to this level.
The trend in gold is negatively correlated with the US dollar, and this trend has become more apparent recently. During the day when the US dollar was under pressure, the price of gold once soared to US $ 1,910 in Asian trading. However, when the US dollar index regained its equilibrium, the price of gold started to fall and once fell below the 1900 mark, setting a new intraday low.
As for the news, there is no major economic data released in the market so far, and the epidemic situation and the progress of the US elections remain the main topic of the market.
Epidemics in Europe and America continue to worsen
According to statistics from the Worldometers real-time information data update website, at approximately 6:00 p.m. on October 27 Beijing time, the cumulative number of confirmed cases of new coronary pneumonia worldwide exceeded 43, 84 million and the cumulative number of deaths exceeded 1.16 million.
The United States, Russia, France and many other countries have recorded record numbers of new corona infections. A new wave of epidemics has swept across parts of the northern hemisphere, forcing some countries to implement new restrictions.
The number of new diagnoses of coronary pneumonia in many southern and southwestern states of the United States has soared again, bringing in more than 83,000 one-day diagnoses on Friday and Saturday, breaking the record of 77,300 cases set in July, and the number of daily diagnoses in the United States in the last 7 days. The average is 68,767 cases, which is also a new record.
In Europe, Italy and Spain imposed new restrictions. A number of countries, led by France, reported a record number of new cases, and the number of new cases in France on Sunday surpassed 50,000 for the first time. Italy implemented new epidemic restrictions, ordered the closure of restaurants and bars starting at 6 p.m., closed cinemas and gyms and imposed curfews in many areas.
Russia’s new cases of new corona infection rose to a record 17,347 on Monday, and the government warned that the epidemic had started to cause further losses outside Moscow. The country has 1.5 million infections, surpassed only by the United States, India and Brazil in the world.
To make matters worse, Larry Kudlow, head of the White House National Economic Committee, said negotiations on the crown’s new bailout plan have slowed down, although House Speaker Pelosi still has an agreement to reach. to an agreement before election day on November 3. hope. Many Senate Republicans oppose the roughly $ 2 trillion scale discussed by Pelosi and Treasury Secretary Mnuchin.
Michael Arone, chief investment strategist at State Street Global Advisors, said: “Concerns about the rebound in the new crown epidemic and the failure of Republicans and Democrats to reach an agreement on fiscal policy have made investors uneasy.
Amo Sahota, CEO of Klarity FX, a currency consulting firm, said: “As the S&P 500 Index has fallen, the market has become tight. The danger is clearly that if the number of cases continues to rise as before, North America has to start implementing more restrictions, including curfews. Even a lockdown, even though the government has repeatedly told us that they don’t want to do this. “
Some analysts noted that the resurgence of the epidemic in Europe and the United States has further overshadowed the economic recovery, and short-term safe-haven purchases may continue to support the US dollar. The current market sentiment in the US general election has not been clearly reflected, but as the general election approaches, market hold sentiment is expected to increase, awaiting the release of key risks.
Countdown to US Elections: Does the Market Underestimate the Likelihood of Trump Winning?
Right now, there is only one week left before the results of the US presidential election are announced. Before Election Day on November 3, more than 60 million Americans had voted, setting a record for voting speed. and possibly the highest participation rate in more than 100 years.
Although national polls show that Biden is consistently ahead of Trump, the battle between the two is much more intense in the battlefield states, and the outcome depends primarily on who can win the battlefield state.
In fact, Biden’s advantage in the poll support rate has converged. Average data from Real Clear Politics polls shows that the approval rate of the Biden and Trump polls has changed from 51.2% to 42.3% on October 14 of last week to 50.7% to 42 , 8% on October 22. Biden’s lead is down. narrow.
Biden’s lead in swing states has also narrowed since last week. Although Biden again led the Georgia polls, he also lost the Ohio lead.
Reuters wrote a warning that some investors on Wall Street gambled excessively on Biden’s win, which will cause volatility in financial markets like stocks and bonds.
“To some extent, the market underestimated the possibility of a rebound in Trump’s election,” said Karl Schamotta, chief analyst for global strategy at Cambridge Global Payments.
Market watchers are now concerned that if Trump wins the election annoyingly, or if the election outcome is uncertain, a host of positions similar to 2016 may be forced to liquidate. In the 2016 election, investor Bocang overwhelmingly predicted Hillary’s victory.
Rodrigo Catril, a currency analyst at National Australia Bank, noted that many investors are unwilling to establish new positions before the US elections.
Catril said: “I think a lot of people can remember the bad experience of the 2016 Trump-Clinton election. If I were in office at that time, I would probably lose a lot. I think the strategy this time is to go lightly, and on the day of the elections. Move instead of building heavy positions before the elections. “
King Lip, chief strategist at Baker Avenue Asset Management in San Francisco, said signs of a closed election often lead to more volatility before Election Day. “The gap in the polls appears to be narrowing … this will only bring more uncertainty.”
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