Equities
US stock
markets re-cooped on Monday some losses as US legislators near an agreement on
the delayed fiscal stimulus package. However, investors still have too many
reasons to worry due to Covid-19 surging numbers and the US elections uncertainty.
Trump and Biden will have their first presidential debate on Wednesday at 5:00 AM
(UAE time).
The Democrats
and Republican’s battle is not only on the first office in the united states
but on getting the majority in the Senate and the House. A Democratic Congress
with a Republican president or the other way around would not be the desired
result for markets.
The house
speaker Nancy Pelosi proposed a compromising deal of $2.2 trillion relief package
however, it is not clear yet whether the deal will pass through as it is, or
republicans will ask for more cost’s trimming. It is worth noting that,
republicans suggested a $1.3 trillion package, while the Democrats asked for
$3.4 trillion.
Change % | |
+2.0% | |
+1.8% | |
+2.5% | |
+0.6% | |
+2.7% | |
+1.3% | |
+1.8% |
Currencies
A better
risk-on sentiment paused the US dollar’s rally on Monday and led the US Dollar index to
close in the red for the first time in nearly two weeks. Nonetheless, the technical
outlook remains
positive while above 94.04.
The EUR/USD found support on Monday around the
previously discussed 1.1621 level. Currently,
the pair eyes testing the resistance located at 1.1713. A daily close above
that resistance would change the technical outlook to neutral, while a daily
close below 1.1621 may send the pair even lower towards 1.1459.
GBP/USD reversed on Monday to the higher trading zone 1.2773 – 1.3048 and
signaled a weaker bearish sentiment therefore, the price could pursue testing
the high end of the zone.
Commodities
The oil price
stabilized on Monday due to a better risk-on sentiment. Today, Brent oil has found
support around $42.50, while the US Crude remained
above $40 a barrel. That said, oil fundamentals are
still weak as concerns of lower global demand weigh on investor's sentiment.
Gold price regained some territory on Monday due to a softer
US dollar and steadied in the current trading zone $1,861 - $1,921. Thus, the
price could be on the way for a test of the high end of the zone.
Looking Ahead
Markets
expect the Eurozone consumer confidence index final read for September at 1:00 PM
(UAE time) and the German inflation rates at 4:00 PM, then-Fed members Williams
and Harker speak at 5:15 PM and 5:30 PM respectively. At 6:00 PM eyes will be
on the US consumer confidence index numbers for September and at 9:00 Fed
Williams delivers a second speech.