Meanwhile optimism in US Fiscal Stimulus package pushed dollar index lower as Democrats and Republicans inched closer to agreeing a second major fiscal stimulus for the world’ slargest economy. However there is no concrete announcement yet and if any disappointment comes before US election may trigger huge risk-on sell-off across the board.
The pound on Wednesday recorded the biggest rally since March amid ease in Brexit talks. Sterling gained steadily helped by EU chief negotiator Michel Barrier’s comments that a trade deal between the UK and the bloc was “within reach” if both sides were prepared to compromise. The signs of potential progress mark a turnaround from late last week, when prime minister Boris Johnson warned that the UK was prepared to walk away without a deal unless the EU showed a “fundamental change of approach.
US Market falls as investors await stimulus
The US stock market finished lacklustre session lower on Wednesday, 21 October 2020, as investors weighed the latest developments in reaching a stimulus agreement. Rising coronavirus cases on both sides of the Atlantic and a busy earnings day were also grabbing investor attention.
The choppy trading on Wall Street came as traders kept an eye on the latest developments in Washington, as lawmakers try to reach an agreement on a new stimulus bill. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a deal before a Tuesday deadline and now aim to finalize a proposal before the weekend.
Wall Street’s fear gauge touched a one-month high earlier on Wednesday as the U.S. election campaign enters its final stretch. President Donald Trump and Democratic challenger Joe Biden will face off in their second and final debate on Thursday night where Trump will attempt to change the trajectory of a race that Biden is leading, according to national polls.
Economy Continues To Improve At Modest Pace, Says Fed Beige Book- The Fed’s Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the pace of economic growth characterized as slight to modest in most districts. The report said manufacturing activity generally increased at a moderate pace, while residential housing markets continued to experience steady demand for new and existing homes. Banking contacts also cited increased demand for mortgages as the key driver of overall loan demand, the Fed said.
Meanwhile, the Fed said commercial real estate conditions continued to deteriorate in many districts, with the exception being warehouse and industrial space where construction and leasing activity remained steady. The report also said consumer spending growth remained positive, but some districts reported a leveling off of retail sales and a slight uptick in tourism activity.Meanwhile, the Fed said commercial real estate conditions continued to deteriorate in many districts, with the exception being warehouse and industrial space where construction and leasing activity remained steady. The report also said consumer spending growth remained positive, but some districts reported a leveling off of retail sales and a slight uptick in tourism activity.
Employment increased in almost all districts, the Fed said, although growth remained slow. Job gains were reported most consistently for manufacturing firms, but firms continued to report new furloughs and layoffs. On the inflation front, the Beige Book said prices rose modestly across districts since the previous report. Input costs generally increased faster than consumer prices, although some sectors—notably construction, manufacturing, retail, and wholesale—passed along the higher costs to consumers.
TREND : WEAK BULLISH
Time : 22/10/2020
Pivot : 1.1853
Technical View : LONG ABOVE 1.1873
Target : 1.1884, 1.1893, 1.1901, 1.1917
Technical View : SHORT BELOW 1.1833
Target : 1.1813, 1.1805, 1.1778, 1.1756