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Original title: Under the weight of the epidemic, hopes for a stimulus plan are low, the market panicked and gold was favored
FX168 Financial News (Hong Kong) Tuesday (October 27), Asian market in the morning,Gold priceIt was basically flat, with a slight increase of 0.11% to $ 1,903.62 an ounce. Record outbreaks in the United States and France, as well as tightening of restrictions in Spain and Italy to contain the second wave of the epidemic, put pressure on risk sentiment.
(30 Minute Gold Spot Chart, Source: FX168)
Negotiations on the stimulus bill are difficult and the epidemic is severe in Europe and America.
There is only a week left before the US election and there is not much time to complete the relief plan before then, making investors more cautious. In terms of viruses, the number of infections in the United States has set a record in recent days. Europe has taken a further step towards the strict regulations implemented in the early stages of the outbreak. As leaders from various countries are working to get the epidemic back under control, they also face more and more voices against the restrictions. “Fiscal stimulus measures appear not to be as fast as we think, and the virus is coming faster than we think,” said Keith Buchanan, portfolio manager at GLOBALT Investments in Atlanta. “Putting these two together is to some extent a reality check on the market.” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said: “The challenge for the market is that in most cases they are already seeing a very strong economic rebound. The new outbreak and the two possible recessions that bottomed contradict directly this assumption. “
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin once again tried to reconcile their differences over the virus rescue plan. White House economic adviser Larry Kudlow told reporters that the differences between the two sides “have narrowed,” but “the more they narrow, the more conditions the other side faces.” Kudlow said the negotiations have slowed down.
Risk assets fell across the board, gold earnings
Asian stock markets also continued the previous downward trend of the European and US stock markets. The Nikkei 225 index fell more than 1%, the Australian ASX200 index fell 1.1% and the S&P 500 index did not change much in the Asian market after experiencing a sharp decline in the US market.
Investors flee risky assets and, naturally, safe-haven assets benefit from them. The dollar index is basically flat above 93.00 and is currently slightly below 94.04. Gold stood out, rising more than 0.1% in early trading today.
The next day, the market still lacks the backing of important economic data. China is convening the fifth plenary meeting to discuss economic development and the path for the next 15 years. Currently, Brexit negotiations are also ongoing, and likely to continue, because both sides are working hard to finalize a deal by mid-November. Therefore, the market is expected to still be affected by sentiment related to the epidemic.
Revision: TIER
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