Stock exchange indices rises with the accelerating epidemic

19.10.2020 11:46|Conotoxia Ltd Analyst Team

Hopes for an agreement in the United States and good macroeconomic data from China seem to improve moods early this week. This may be indicated by stock indices in Asia, Europe and futures contracts in the USA. This morning's quotes are above Friday's closing prices.

American futures contracts are traded green on Monday. This may be due to the fact that Nancy Pelosi, House of Representatives Speaker, has set a maximum deadline for agreeing on a support package for the US economy on Tuesday. Pelosi added that she is optimistic about the negotiations after a weekend conversation with Treasury Secretary Steven Mnuchin.

Investors are also waiting for the speech of Fed President Jerome Powell at the annual meeting of the International Monetary Fund, although more information on the monetary policy of the U.S. central bank will probably not be disclosed.

From the positive information it is worth noting the data from China. The National Statistics Office reported that the Chinese economy grew by 4.9% y/y in the third quarter of 2020, accelerating from 3.2%. Moreover, industrial output grew by 6.9% y/y in September, which is the sixth month in a row and the fastest growth since December 2019.

In turn, China's retail trade grew by 3.3%. It seems that for the time being, on the wave of information from both the US and China, silver, which was quoted on Monday by nearly 2% higher, at 24.7 USD per ounce, gained the most.

From the negative information coronavirus still dominates. Infections in Europe are spreading and countries are implementing more restrictions. The situation is no better in the United States, where for the fifth day in a row over 50 thousand infections were reported. In Italy, changes in the teaching system are planned. It is also possible to introduce restaurant closures after 10 p.m. In Poland, meanwhile, the government has decided to build a field hospital at the National Stadium in Warsaw, which clearly shows how badly we find ourselves in this situation.

However, we do not observe major changes on the currency market. On Monday, the dollar index oscillated at 93.7 points, as investors are still waiting for further information on the new stimulus plan in the US. The currencies that seem to gain the most to USD on Monday morning are AUD and NZD. However, nothing new here seems to affect the exchange rates, except perhaps the historic victory of New Zealand Prime Minister Jacinda Ardern in the parliamentary elections. Her Labour Party secured a clear majority in parliament for the first time since the introduction of proportional representation in 1996. After passing the electoral risk, investors will see if the upcoming inflation reading will help clarify the picture around possible negative interest rates, Bloomberg said.


Daniel Kostecki, Chief Analyst Conotoxia Ltd.

Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

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71.98% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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