Europe To Open Lower As Trump Pulls Plug on Fiscal Stimulus
Fiona Cincotta October 7, 2020 5:31 PM
Trump stalls stimulus talks until after the elections
European markets are heading out of the bloc slightly lower as the risk off drive fades following steep losses on Wall Street. President Tump pulling the plug on stimulus talks until after the elections hit risk sentiment hard in the US session, with riskier assets such as stocks sharply out of favour, whilst investors sought out the safe haven protection of the US Dollar.
The question is, can the small private businesses which keep the US ticking over survive? Many are already under extreme amounts of pressure as consumption returns very slowly. The prospect of another month without support could be the final straw for many. We can expect to see the economic recovery in the US slow on the back of Trump’s decision, unemployment could even start to tick higher again.
Heading into the European session, the reaction to Trump’s cancelling of fiscal stimulus talks is less acute. On the one hand the safe haven greenback is pushing higher and oil prices are pushing lower, however, on the other European markets are showing some defiant resilience. The sell off in Europe is lighter after Wall Street closed off session lows as Trump attempted to back track slightly.
German industrial production misses
The European economic calendar is relatively light. German Industrial production missed forecast -0.2% MoM in August vs +1.2% jump in July. The impressive run of data from the Eurozone’s largest economy has hit a speed bump reminding investors that this will be a shaky ride to recovery.
UK house price data will be in focus later this morning, potentially providing another bump higher for house builders. Looking ahead FOMC minutes will be the key focus in the US session.
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.