The Japanese retail sales for August of -1.9% came in higher than expected of -3.5% and better than the prior of -2.9%, while the Chinese Manufacturing PMI rose from 51.0 in August to 51.5 in September giving clear evidence of the country’s steady steps towards economic recovery.
The first Trump/Biden debate has ended without a clear winner and Biden held his tiny margin of victory. The first presidential TV encounter was not presidential, as both sides interrupted each other multiple times and used expressions such as “clown”, “resist” and “shut up”.
Biden pledged to accept elections’ results, while Trump attempted to cast doubt about the electoral process hinting that he may not concede power if Biden wins with a narrow margin and sparking concerns of possible political chaos on the horizon.
The upcoming vice-presidential debate between Kamala Harris and Mike Pence will take place next week, on Oct 7th.
Equities
Asian stock markets edged higher on Wednesday due to positive Chinese data, while a neutral result of the presidential debate weighed on the market sentiment.
The US House Speaker Nancy Pelosi said on Tuesday, she worked with the US treasury secretary Steve Mnuchin and hoped she get a $2.2 trillion of fiscal stimulus package with the white house this week.
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Stock Market |
Change % |
|
-0.5% | |
|
-0.5% | |
|
-0.7% | |
|
+0.2% | |
|
-0.4% | |
|
-0.8% | |
|
-0.3% |
Currencies
The US dollar edged lower against a basket of currencies and closed on Tuesday in the red for the second day in a row. A daily close below 93.75 may send the US Dollar index even lower for a test of the inverted head and shoulders neckline.
EUR/USD has tested on Wednesday its highest level in a week at 1.1754 then slipped after. The pair may rally towards 1.1909 while above 1.1713.
GBP/USD rallied due to a weaker Us Dollar. The internal market bill proposed by the UK PM has been approved by the house of commons. The bill gives ministers the power to break the divorce deal with the EU, despite threats of legal consequences from Brussels. Markets would like to find out what is the EU following step, and whether this update will affect this week’s round of negotiations. From a technical point of view, Cable could rally towards 1.3048 while above 1.2773.
Commodities
The oil price retreated on concerns of the surging Covid-19 numbers may coincide with the winter’s flu season causing more restrictions and reduce demand further. The Brent oil extended losses on Wednesday therefore, the price may edge even lower towards $39.60. On the other hand, a daily close below $38.37 could send the US Crude towards $36.32.
The gold price stabilized above $1,861 and rallied eying a test of $1,921. It is worth noting that a daily close below $1,861 could resume bearish price action towards $1,796.
Looking Ahead
Eyes will be on the US ADP employment change of September at 1:15 PM (GMT) and the final read of the US GDP Q2 come at 1:30 PM. At 3:30 PM oil investors will find out about the change in the US oil inventories and at 4:00 PM Fed member Kashkari will speak.
