Risk On Relief Rally as Joe Biden Takes the White House
Fiona Cincotta November 9, 2020 6:47 PM
European bourses are opening firmly on the front foot in a risk on relief rally as Joe Biden wins the race to the White House.
European bourses are opening firmly on the front foot in a risk on relief rally as Joe Biden wins the race to the White House. Whilst Trump still refuses to accept the result, this isn’t affecting the joyous mood in the market, at least for now.
European bourses are advancing, US futures are pushing higher and even oil is rebounding after a tough previous week. However, the outlook could darken slightly from here given that Biden could also struggle to push a big covid fiscal stimulus package through congress. Whilst a rescue package is still possible, a larger package is unlikely putting more pressure on the Fed to act. The markets will be following stimulus talks closely across the lame duck period ahead of Joe Biden’s inauguration in January.
With covid cases in the US surging and the total number of cases stateside nearing 10 million, the pressure is on for a deal. Oil for the time being is focusing on the Biden win, with Brent trading over $40 per barrel. However, without a big rescue package and as more of Europe locks down, this level is unlikely to hold for long.
Brexit talks resume
Brexit is very much back in focus as Michel Barnier returns to London to resume Brexit trade talks with his UK counterpart David Frost. Boris Johnson was sounding more upbeat over the chances of a deal after speaking with EC President Ursula von der Leyen saying that a deal was there to be had. However, differences remain over fisheries and a kevel plating field.
Pressure is once again mounting as a mid-month soft deadline comes into focus. There is a good chance that rising covid cases and Joe Biden in the White House, who has previously cast doubt on Boris Johnson’s Brexit moves could focus minds to get a deal done. GBPUSD trades just shy of $1.32 amid risk on USD weakness and cautious pound strength.
BoE’s Andrew Bailey could move GBP when he speaks this morning regarding covid and its impact.
From time to time, GAIN Capital Australia 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.