Morning Report – Wednesday 28th October
Christine Lagarde is under pressure from senior ECB officials to provide more stimulus to combat deflation. Inflation figures for the Eurozone are released on Friday, and are expected to show that the Eurozone will sink into a third consecutive month of deflation. Governments are still arguing over the details of the EU’s €750 billion recovery fund.
French President Emmanuel Macron has not ruled out a second national lockdown after daily coronavirus cases hit a record high of just shy 80,000, and daily deaths hit its highest level since April. Germany’s local health authorities are also reportedly crumbling over surging cases in the country.
Global equities continued to fall yesterday after a poor start to the week, and Oil prices have also dropped to their lowest level since early October amid concerns over the fiscal stimulus bill and the growing uncertainty on the US election, although most major pollsters are predicting a Biden win.
The pound is rising in early morning trading against both the euro and dollar. Boris Johnson’s Brexit Bill is set to be blocked by the House of Lords next month after breaking international law. The day is light on the economic data front, and with no central bank speakers, the currency will likely be dictated by international events.
The euro is trading flat against the dollar this morning after falling to a nine-day low yesterday. Daily coronavirus cases on the continent continue to rise, especially in Spain which saw a 59% rise in cases versus a day earlier. Senior ECB official de Cos speaks again today, but gave away very little on the strength on the EU economy in his speech yesterday, focusing on cross-border banking.
The dollar is trading flat against most major currencies, but is falling against the Japanese Yen in early morning trading today. Mike Pompeo agreed to work closely with India to curb China’s power in Asia, and American political scientist, Ian Bremner said that US-China relations will worsen no matter who wins the election. The day is light on the economic data front, and investors will be focused on the upcoming election, only six days away.
Main Economic Data/Central Banks/Government (All times BST)
7:00 a.m.: Germany Sept. Import Price Index
7:00 a.m.: Turkey Oct. Economic Confidence
7:30 a.m.: Turkey central bank inflation report
7:45 a.m.: France Oct. Consumer Confidence
8:00 a.m.: Spain Sept. Retail Sales
10:00 a.m.: Italy Sept. PPI
11:15 a.m.: ECB’s De Cos speaks
2:30 p.m.: EIA crude oil inventories
South Africa’s budget policy statement