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Original Title: This US Election Scene May “Scare” the Market! Today Two Major Hazard Events Happen, Gold Retreats to 1880 and Bears Hold Audience
FX168 Financial News (Hong Kong) News Thursday (Oct 29) European trading hours, European stocks rallied slightly after experiencing the worst day since late September, but given that the European epidemic situation is not optimistic, overall earnings are limited. Furthermore, with the US elections approaching, the wait-and-see sentiment has strengthened and investors are more inclined to take a cautious stance. In the persistent environment of risk aversion, the US dollar remained strong. Spot gold tried to stabilize after yesterday’s slide, but the situation is still not optimistic. The current trading volume is below 1880. Looking ahead to this trading day, the market focused on the decision of the European Central Bank and on the behavior of the US GDP in the third quarter.
Today, European stock markets looked quite shaky at the market opening, gave up on opening gains, and remained largely volatile. Investors are taking in the new lockdown measures in France and Germany and await the latest monetary policy decision from the European Central Bank (ECB).
European stock markets saw their biggest drop in a day since late September on Wednesday, when Germany and France announced new lockdown measures to guard against a new wave of new krona cases sweeping Europe. According to a new study from Imperial College London, the British government is also under pressure to tighten restrictions, as new cases will double every nine days.
Before the United States general election on November 3, the market was also extremely volatile, cases of coronavirus in the United States increased, and hopes for an upcoming fiscal stimulus weakened. On Wednesday, Wall Street suffered its worst sell-off in months and the Dow Jones Index fell 934 points. US stock futures opened positively on Thursday.
Although the stock market is likely to regain some of the ground lost in yesterday’s trading, overall risk sentiment remains relatively fragile. Before the weekend, it will be a real test of the determination of shoppers looking for bargains, but given the risk of choices, it is difficult to imagine a substantial rally in the stock market in the near future. Therefore, the possibility of the US dollar stabilizing in the next trading days is ruled out.
In the currency market, the US dollar is recovering from a slight decline in the Asian market. The current transaction price is close to the same level, but the exchange rate against the euro is significantly higher.
Currently, the US Dollar Index continues to climb, expanding the gain above 93.50, approaching yesterday’s high of 93.65.
“The market atmosphere is similar to the one in late February and early March,” said Rikiya Takebe, senior strategist at Oksan Internet Securities, referring to the time when the new coronavirus began to spread in the United States and Europe.
“At that time, the market turned to buying US dollars to avoid risk in an emergency, which caused the US dollar to rise. I think the current market trend is somewhat similar.”He said.
As the US dollar regained its gains, spot gold earnings have continually declined.Gold priceThe current trade volume is below 1880, and the price of gold fell 2% yesterday and fell below the 1870 mark.
Bob Haberkorn, senior market strategist at RJO Futures, said: “At present, precious metals’ reliance on further stimulus measures is very high, and now the bear field is in full control of the situation.Overall, due to the lack of stimulus measures and the risk-off pre-election mindset, the price of gold fell amid the strength of the US dollar. “
In European trade, attention will be focused on Thursday on the European Central Bank’s interest rate decision, which will be announced on Thursday at 8:45 p.m. Beijing time.
The market speculates that the European Central Bank could introduce a new stimulus policy earlier than scheduled at today’s monetary policy meeting. Previously, analysts generally believed that the new stimulus policy would have to wait until December.
Nordea analysts said in a research report: “Recently, there have been more reasons for the European Central Bank to further ease monetary policy, but we still expect the European Bank to wait until December to further ease monetary policy.”
But the analyst also noted that “the European Central Bank can make a clear commitment to accelerate asset purchases, or at least send a clear signal that more easing policies may be introduced in December. The latter is more likely than the former. , and this approach should be Enough to avoid disappointment in financial markets. “
“If European Central Bank President Lagarde paves the way for further relaxation of policies in a press conference after the meeting, the euro could fall further,” the Commonwealth Bank currency analyst said in a report. of Australia (CBA), Kim Mundy.
In addition to the decision of the European Central Bank, today the market will also pay attention to the third quarter GDP data of the United States. Economists generally believe that America’s GDP in the third quarter will skyrocket by 30%. This will be the largest increase since the government began tracking quarterly GDP data in 1947.
It’s worth noting that this happened after the second quarter of the US economy plummeted. The initial value of the real annualized quarterly rate of GDP in the second quarter of the United States plummeted 31.4%, the largest drop on record.
Daniel Alpert, senior researcher and adjunct professor of macroeconomics at Cornell Law School, said that the huge GDP growth in the third quarter will show that the US economy has broken away from the level of severe stagnation for the first time in history. .
“Given the current weakness, any disappointing results from this data can have a significant impact on the market,” said Michael McCarthy, strategist at CMC Markets in Sydney.
Josh Bivens, director of research at the Institute for Economic Policy, said that US GDP data in the second quarter fell sharply, which means that any increase in GDP in the third quarter was achieved with the previous value decreasing. significantly. So even if the US GDP data in the third quarter jumps, it does not mean that the US economy is out of trouble, in fact it is far from reaching this level.
Nomura Securities economist Lewis Alex said: “Although the base effect will drive real GDP higher in the third quarter, monthly data shows that the recovery has entered a slower stage.”
In addition to the above incidents, the market has yet to keep an eye out for the US elections. The US elections are less than a week away, and the US is also facing a surge in new crowns like Europe, so traders are also preparing for market fluctuations.
Investors are also increasingly concerned that the outcome of the US election will be controversial, which could trigger a sell-off in risky assets.
Biden’s poll approval rate has always been ahead of incumbent President Trump, but traders are cautiously betting on Biden’s victory and the possibility of a “big win” for the Democratic Party – that is, the result of control both cameras of the House.
According to a Hong Kong media report “Hong Kong 01,” one of the most accurate polling companies in the 2016 general election, the latest Rasmussen Reports poll showed that the gap between the two began to narrow rapidly. The poll found that Biden’s lead has shrunk from 12% two weeks ago to 3% a week ago, and now Trump even leads by one percentage point.
This year’s general elections are stalled due to the war. The “transitional state” has once again become a battlefield for the strategists of the two main parties. Trump went to Michigan and Arizona in the last two days, and Biden started his final sprint in Georgia.
The external analysis of this election has nine changing states: Texas, Ohio, Georgia, Florida, Iowa, North Carolina, Arizona, Pennsylvania, and Minnesota.
Barclays senior strategist Shinichiro Kadota said: “Although Biden leads the polls, Trump is catching up in some swing states. If the electoral situation is closer, even (on Election Day) he may not announce all the voting results, then Of course, volatility may increase. “
Some analysts pointed out that the mainstream media in the United States have begun to realize the possibility of President Trump’s victory. As long as Trump wins enough votes in major swing states like Florida, Texas and Pennsylvania, he will be in this election. You will win in the game.
The “new king of debt” Jeffrey Gundlach, who accurately predicted Trump’s victory in the 2016 presidential election, predicted once again this week that Trump will win reelection.
Gundlach believes that next week’s election will likely repeat the scene from 2016, because polls are generally designed and Trump voters are reluctant to contact voting agencies and the media because they fear that their political beliefs will be seen. affected. revenge.
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