Global stocks and equity futures saw choppy trading Tuesday as investors weighed whether coronavirus cases will hurt the global economy and stimulus talks in Washington dragged on. The dollar retreated.

U.S. futures edged higher with their European counterparts, while Asian stocks pared earlier losses. Shares were little changed in Japan and China, and slipped in South Korea, Australia and Hong Kong. Declines were more modest than those seen in the U.S. overnight, when the S&P 500 saw its biggest loss in a month. Ongoing spending talks in Washington continued to weigh on sentiment as prospects dimmed for fiscal aid before the presidential election.

The 10-year Treasury yield dipped below 0.8%. Oil climbed with copper, while gold edged higher.

FX Overnight News:

  • The number of Covid-19 cases continued its incessant rise, with over 43.4 million cases globally as of Oct. 27, according to Johns Hopkins University data.
  • Europe has been hard hit by this second wave of the virus, with France, for example, on Monday seeing the highest number of coronavirus patients going into hospital since April. This has resulted in a number of countries imposing new restrictions--Spain has announced a state of emergency for six months--curtailing economic activity.
  • This increases expectations of action by the European Central Bank when its governing council meets on Thursday, although the consensus view is that the bank will only announce fresh stimulus at its December meeting.
  • An additional source of concern for the markets is the fading prospect of a new U.S. coronavirus relief package. House Speaker Nancy Pelosi said Monday that she remained hopeful an agreement can be reached before the Nov. 3 elections, but this looks increasingly unlikely.
  • Oil prices edged higher Tuesday, rebounding to a degree after Monday’s hefty losses, but the surge in coronavirus cases in the U.S. and Europe means sentiment remains gloomy.

FX Overnight Volatility

Today's Economic Calendar:

Chart of the Day:

Source: Bloomberg, Investing.com, Finviz

Posted on

October 27, 2020


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