2nd November 2020 - The good news is certainty not Biden nor Trump

Walid Salah Eldin

Active member
The good elections outcome to the markets is not Biden nor Trump, as it is the certainty which could be following these elections.

Any news about the presidential elections results from Pennsylvania, North Carolina and Florida will be tracked, but any surprises from any other state will be shocking to the current pricing in the markets.

The long-lasting outcome for any reason can dampen the market sentiment and cause sell-off in the equities markets triggering worries about already worrying situation. As The markets will not welcome tied results triggering uncertainty about the future of the economy and harden its situation which is already hard.

As usual also any results refer to taking the house by a party and taking the white house by another party are not that good news to the market.

Because this will also harden taking crucial decisions easily to stimulate the economy which has already lived in sake of another reflation plan for more than 2 months with no clue because of the conflict between the 2 parties which lasted till the elections with no solution.

While the rising of Covid-19 cases is weakening the global economy exposing it to double bottom recovery formation or may be worse.

We have also other events this week such as today Oct manufacturing PMI releases from the big industrial economies which are widely expected to show continued improving.

But the current cautiousness because of the virus spreading is taking the market attention more nowadays and can tackle the building on these data. Even the progress in talking about Brexit deal between EU and UK could not cap the GBP from falling in the beginning of this week on the worse than expected Covid-19 news from UK which triggered more than expected aggressive lockdown response from The PM Boris Johnson.

We have also next Wednesday the outcome of a new FOMC meeting, However it is widely expected to come with no new keeping its waiting stance as it is unchanged since the committee has decided to lower the Fed fund rate to be between zero and 0.25% last March, When it decided also to encourage the banks to keep their discount window opened as wide as it possible by removing the RRR to provides financing access using all of their available capital and liquidity to lend the household sector and spur business investment and that what has actually happened.

By God's will, We have also by the end of the week the release of Oct US labor report which is expected to show adding 700k of Jobs out of the farming sector and rising of the average earning per hour by 4.6% yearly.

The volatility is not such a thing that can be avoided this week and it can keep rising over the short term during these events which are overwhelming the markets. So, Take Care!

Have a good day

Kind Regards

Global Market Strategist of FX-Recommends

Walid Salah El Din
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