Will the markets be able to survive the elections?

By 24/09/2020News
Morning Stock News

Gold  1853,085
(-0,55%)

EURUSD   1,1655
(-0,03%)

DJIA  26561,50
(-0,47%)

OIL.WTI  39,43
(-0,38%)

DAX   12539,60
(+0,01%)

The closer the US elections, the more difficult the situation in the financial markets. This election should be the most controversial election in the modern history of the United States, and investors are very concerned about it.


EUR/USD

EURUSD

An interesting situation is emerging in the US Federal Reserve. At different times, the members of the reserve system begin to contradict each other and even to refute statements made by colleagues. Of course, everyone has their own opinion, but not in a structure where the action plan must be shared. Some Fed members believe that the economic recovery has been weak and uneven. It is now clear that the US Federal Reserve will act on the circumstances and may even raise the rate if necessary. There is no specific plan.
Congress has not yet agreed on financial assistance measures for companies. The labour market has been sending signals for a long time that this assistance is absolutely necessary. In this uncertain climate, the hand of the investor will always be next to the “sell” button.
It is likely that stock indices have reached some saturation point and are not going to try to make new highs. Today we are waiting for data on initial state unemployment claims. If they turn out to be at previous levels, we can expect the indices to decline further. On Wednesday, the DAX closed with an increase of 0.39% and the S&P500 falls by 0.8% to 3280.


Euro

On Wednesday, the EUR/USD pair broke through the lower bound of the eight-week trading range of 1.1700. So far the price is very close to this level and the recovery is not ruled out. The situation in Europe is not easier than in the USA. However, the poor state of affairs in the US is on the contrary strengthening the dollar. This can now be clearly seen. We have recently discussed that the ECB has no desire to strengthen the Euro, but there are virtually no options to put it down. Therefore, the current exchange rate situation is more than satisfactory to it.


Oil

WTI oil prices on Wednesday are still under pressure. Although there was an increase during the day to $40 per barrel, there are still quite a few factors on which further developments will depend. The first factor is the coronavirus and the probability of a lockdown, which will inevitably affect the price. The second factor is the resumption of oil supplies from Libya after eight months of civil war. The third factor is the rising US dollar, which is putting pressure on the price. The US oil reserve figures are worse than predicted, which is another reason for sellers.


What awaits us today?

10.00 IFO Business Climate Index in Germany for September
14.30 Number of initial applications for unemployment benefit in the USA
16.00 Sale of new housing in the USA for August


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