Treasury yields rose and U.S. futures extended overnight gains amid optimism about progress on stimulus talks in Washington. The dollar retreated.

The benchmark 10-year yield climbed above 0.8% to a four-month high after House Speaker Nancy Pelosi said she remains hopeful of a deal before the election. S&P 500 contracts edged higher after the gauge bounced back from Monday’s selloff. Shares saw modest gains in Japan, Hong Kong and South Korea, and slipped in China. European futures pointed higher.

Elsewhere, tech shares mostly shook off the U.S. Justice Department’s decision to sue Google for allegedly abusing its power. Netflix Inc. plunged in late trading after it missed Wall Street estimates. The yuan climbed to the strongest since July 2018 and copper hit its highest in more than two years. Oil slipped.

FX Overnight News:

  • The White House and Democrats in the U.S. Congress moved closer to agreement on a new coronavirus relief package on Tuesday as President Donald Trump said he was willing to accept a large aid bill, in an attempt to get a deal done before the Nov. 3 election.
  • Negotiations between House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will continue on Wednesday. However, even if these two parties do come to an agreement, there’s no guarantee it will be signed into law as Republican Senators' opposition to the measures’ price tag remains strong.
  • The impact of the coronavirus outbreak on the global economy was illustrated by a United Nations report Wednesday, which said the value of global trade is set to fall by 7% to 9% in 2020 from the previous year.
  • Back in Europe, a second wave of the Covid-19 outbreak continues to cause havoc, with Spain now considering curfews in hard-hit regions like Madrid in a bid to tackle potential contagion. France has already imposed curfews on some of its major cities, including Paris, while the U.K. put a further 3 million people in the Greater Manchester into its 'tier 3' lockdown category on Monday, closing many non-essential businesses.
  • Economic data centers around U.K. inflation numbers Wednesday, with September consumer prices rising 0.5% on the year, an increase from the 0.2% figure seen the previous month.
  • U.S. crude futures traded 0.8% lower at $41.38 a barrel, while the international benchmark Brent contract fell 0.9% to $42.78.

FX Overnight Volatility:

Today's Economic Calendar

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Source: Bloomberg, Investing.com, Finviz

Posted on

October 21, 2020


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