Marius Paun | London, UK | Senior dealer | Friday 02nd October 2020
US President tests Positive for Coronavirus
The US stocks recouped some of the recent losses this week. That was until Friday when news broke that President Donald Trump and his wife tested positive for coronavirus. That increased the uncertainty ahead of the upcoming November elections. After potential exposure, his challenger, the Democratic candidate Joe Biden, tested negative!
The much-awaited US Presidential debate was characterised by both sides as total chaos, shamble, disgrace, with many political commentators saying it was the worst in decades. Neither of the candidates was very specific on economic recovery policies, an issue which the public was most keen to hear their comments on.
We also had the non-farm payrolls data which showed the US economy added 661,000 jobs in September, missing the forecasted 800,000. At the same time, the unemployment rate dropped to 7.9% in the final report before the elections. The US Labor Department also revised the August figures to 1.489 million jobs added, up from 1.371 million.
China is preparing to launch an anti-trust case against Google according to Reuters because the US giant has ‘leveraged the dominance of its Android mobile operating system’. Interestingly the case was ‘proposed’ by Huawei in a sign that Beijing is counterattacking amid the recent escalations in tensions.
The EU has begun legal proceedings against the UK after Downing Street refused to ditch plans to override sections of the divorce deal. European Commission President Ursula von der Leyen sent a letter to the UK government regarding concerns over the draft legislation and said Britain has until the end of November to respond. Brussels is threatening that will take Britain to court over non-compliance with the withdrawal agreement. However, Reuters reported on Friday afternoon that UK and EU are to hold more talks before the next EU summit which is scheduled in 2 weeks’ time.
The European Central Bank President Christine Lagarde commented this week that a stronger euro could weigh on inflation so the Governing council will assess all information regarding the exchange rate. She added the recovery in the euro area remains uncertain and uneven.
Gold recovered somewhat this week, trading around $1900 handle going into the weekend. A renewed drop in the US dollar was mentioned as the main driver.
The US crude oil continued its slump on growing COVID concerns dropping from a high of $40.87 per barrel to a low of $36.78 reached on Friday. The US Department of Energy released its oil inventory on Wednesday showing a drop of 2 million barrels versus expectations for a build of 1 million barrels.