US stocks on Monday notched their biggest one-day drop in a month on fears that rising coronavirus infections will dampen business activity and as another session passed without a deal for pre-election fiscal stimulus. The S&P500 fell as much as 2.9 per cent in afternoon trading, as the latest infection data undercut hopes of the virus being contained. However, the benchmark index trimmed its losses to end 1.9 per cent lower – its biggest one-day loss since September 23 as mentioned in FT.
The US market saw heavy selloff today as coronavirus counts are spiking in much of the United States and Europe, raising concerns about more damage to the still-weakened economy. The data compiled by Johns Hopkins University showed daily coronavirus cases in the U.S. have risen by an average of 68,767 over the past seven days, a record. On Sunday alone, more than 60,000 cases were reported. The country saw more than 83,000 new infections on both Friday and Saturday after outbreaks in Sun Belt states, surpassing a previous record of roughly 77,300 cases set in July. In Europe, Spain’s government declared a national state of emergency on Sunday that includes an overnight curfew, while Italy ordered restaurants and bars to close each day by 6 p.m. and shut down gyms, pools and movie theaters.
Meanwhile, diminishing prospect over the White House and Republicans striking a stimulus deal with Democrats before the election also fuelled selloff. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke several times last week on potential deal to send cash to most Americans, restart supplemental benefits for laid-off workers and provide aid to schools, among other things. But deep partisan difference remains on Capitol Hill, and time is running out for anything to happen before Election Day on Nov. 3. Any compromise reached between House Democrats and the White House would also likely face stiff resistance from Republicans in control of the Senate.
Meanwhile sterling remains muted so far as optimism from Brexit negotiations continues but at the same time broad dollar strength cap the rise in GBPpairs. Despite last Friday’s upbeat Eurozone PMI data, the euro is lower against the dollar in line with broad dollar strength. Overall we can expect euro and pound to move based on how risk sentiment evolve in next few days amid US election outcome as well as rising covid cases across major economies.
TREND : WEAK BULLISH / SIDEWAYS
Time : 27/10/2020
Pivot : 1.1823
Technical View : LONG ABOVE 1.1843
Target : 1.1863, 1.1873, 1.1894
Technical View : SHORT BELOW 1.1803
Target : 1.1783, 1.1773, 1.1749