The Week Ahead 5th – 9th October 2020

Market Outlook for Today 

Shares rose Monday in Asia as investors were encouraged by positive reports about President Donald Trump’s health after he tested positive for the coronavirus. 

Trump briefly ventured out in a motorcade on Sunday to salute cheering supporters. Trump’s medical team reported that his blood oxygen level had dropped twice in recent days, and that they gave him a steroid typically only recommended for the very sick. They also said his health is improving and that he could be discharged as soon as Monday. 

Japan’s benchmark Nikkei 225 gained nearly 1.4% to 23,340.52. South Korea’s Kospi jumped 1.3% to 2,357.93, while Australia’s S&P/ASX 200 surged 2.4% to 5,932.20. Hong Kong’s Hang Seng rose 1.6% to 23,825.56. Markets are closed in Shanghai until Friday. 

Stephen Innes, chief global market strategist at Axi, said global markets were focused on Trump’s recovery. 

It is difficult to look beyond the trajectory of U.S. President Trump’s illness in mapping out the contours of price action in the week ahead,” he said in a report. 

By reducing uncertainty around a possible delay to the U.S. presidential election, the initial market reaction should be positive for risk assets, with U.S. equities and oil prices, for example, reversing Friday’s declines,” Innes said. 

Shares jumped in Japan, Hong Kong, South Korea and Australia, where volumes were lower than normal because of a holiday. S&P 500 futures climbed after U.S. equities finished lower on Friday in a volatile day for global financial markets. 

Crude oil pared some of Friday’s slump. The pound fluctuated following a weekend call between U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen on Brexit. The dollar slipped. 

In other news, New York plans to crack down on coronavirus hot spots as cases surge, while the French government is said to be looking at further restrictions in Paris. 

Overview for the Week Ahead 

The Reserve Bank of Australia is forecast to keep interest rates and its three-year yield target unchanged at 0.25% on Tuesday.  Also, on Tuesday, Fed Chair Jerome Powell and ECB Chief Economist Philip Lane deliver keynote addresses at the NABE conference. 

On Wednesday, the minutes of the Sept. 15-16 meeting of the FOMC could be especially fruitful for Fed watchers, beginning with details of the debate on conditions necessary to trigger a rate increase and the U.S. Vice Presidential debate takes place in Salt Lake City on Wednesday. 

Though the final formal round of talks is over, the British government expects trade negotiations to continue up to the EU summit in mid-October. 

All these events and more have the potential to influence the markets which means there is plenty of trading opportunities. 

Today’s High Impact Events

The times below are GMT+3.

Monday 5th October

  • 17.00 – ISM Non-Manufacturing PMI (U.S.)

Potential instruments to Trade: USD Crosses.  

Tuesday 6th October 

  • 06.30 – Cash Rate & RBA Rate Statement 

Potential instruments to Trade: AUD Crosses.  

  • Tentative – Annual Budget Release (Australia) 

Potential instruments to Trade: AUD Crosses.  

  • 11.35 – ECB President Lagarde Speaks 

Potential instruments to Trade: EUR Crosses.  

  • 16.00 – ECB President Lagarde Speaks 

Potential instruments to Trade: EUR Crosses.  

  • 17.40 – Fed Chair Powell Speaks 

Potential instruments to Trade: USD Crosses & Gold.  

Wednesday 7th October  

  • 15.10 – ECB President Lagarde Speaks 

Potential instruments to Trade: EUR Crosses.  

  • 21.00 FOMC Meeting Minutes 

Potential instruments to Trade: USD Crosses & Gold.  

Thursday 8th October 

  • 10.25 – UK BOE Gov. Bailey Speaks 

Potential instruments to Trade: GBP Crosses.  

  • 15.30 – BOC Gov. Macklem Speaks (Canada) 

  Potential instruments to Trade: CAD Crosses.  

Friday 9th October 

  • 15.30 – Employment Change & Unemployment Rate (Canada) 

Potential instruments to Trade: CAD Crosses.  

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