U.S. futures edged higher after a weak session on Wall Street overnight as investors held out some hope of a deal on stimulus talks. Asian stocks were mixed and European shares looked set for declines.

S&P 500 Index futures climbed after a spokesman for House Speaker Nancy Pelosi said differences were narrowing in talks. Shares slipped in Japan and Australia and fluctuated in China, Hong Kong and South Korea. The 10-year Treasury yield steadied around 0.77% and the dollar held losses versus major peers. The yen dipped and the offshore yuan traded around its strongest since July 2018.

Earlier, the S&P 500 Index fell to the lowest in almost two weeks as time draws short to reach agreement on a bill that could pass by Election Day on Nov. 3. The Australian dollar slid after comments from the central bank’s assistant governor that short-term rates could fall below zero. Oil extended losses after an OPEC+ meeting made no mention of any changes to a plan to further ease output cuts from January.

FX Overnight News:

  • Pelosi’s statement late Monday that differences were narrowing in talks with Treasury Secretary Steven Mnuchin did briefly increase hopes that a deal could be passed before the presidential election. But most investors seem to think that the gap between the two parties is still too wide, and the bad feeling too deep seated, for a package to be agreed upon today.
  • The number of global Covid-19 cases also continues its incessant rise, topping 40 million, according to Johns Hopkins University data. Ireland late on Monday declared a six-week lockdown of non-essential businesses in the latest indication that European authorities are struggling to bring the virus back under control.
  • Europe has been hardest hit with the second wave, but the number of new cases in the United States last week also rose 13% to more than 393,000, approaching levels last seen during the summer peak, according to a Reuters analysis.
  • Exchange operator Euronext (PA:ENX) said its stock exchanges should open smoothly, after a software glitch caused its worst outage in two years on Monday that culminated in a failed closing auction.
  • Oil prices weakened Tuesday on continued worries about the demand for oil going forward given the number of Covid-19 cases continues to mount, particularly in the large oil-consuming nations in Europe and the U.S..

FX Overnight Volatility:

Daily Economic Calendar:

Chart of the Day:

Source: Bloomberg, Investing.com, Finviz

Posted on

October 20, 2020


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