Negotiations on financial stimulus for the American economy remain in the spotlight of investors. Over the weekend, Congressional Democratic leader Nancy Pelosi and Treasury Secretary Stephen Mnuchin were unable to reach a compromise. However, Pelosi noted that she is optimistic about the deal. Also, the presidential administration was given 48 hours to resolve the controversial issues otherwise lawmakers will not be able to approve the agreement before the Presidential election. Overall, there is still hope for a deal. USD is weakening against its main competitors – EUR, GBP, and USD.
Key Drivers for the Week of Oct 19 – Oct 23
- Brexit talks and U.S. elections going down to the wire, markets will remain jumpy
- Recovery at risk from spikes in virus, tighter restrictions, uncertainties on stimulus
- Q3 earnings slate second heaviest of the season, are expectations too complacent?
- U.S. data includes housing numbers, initial jobless claims, preliminary Markit PMIs
- Fed Beige Book slates; Fedspeak includes Chair Powell and VC Clarida
- Bank of Canada Business Outlook Survey should show improvement; CPI due
- Key data from China: Q3 GDP, industrial output, retail sales, fixed investment awaited
- European focus on Eurozone and country manufacturing, services, composite PMIs
- UK slate heavy with Gfk confidence, retail sales, preliminary PMIs, CPI
Oil quotes are making moderate growth attempts. In general, oil is under the pressure of opposite factors. The quotes are supported by the growth of the PRC GDP from 3.2% to 4.9%, as well as the growth of industrial production for September by 6.9%, which is higher than forecasted (5.8%). On the other hand, the price is being pressured by the comments of the IMF, which has worsened the forecast for the state of the economy of the Middle East and Central Asia: this year it should decrease by 4.1%, and oil prices next year will remain in the range of $40–50 per barrel. Today, investors are focused on the meeting of the OPEC+ monitoring group. It may decide to postpone the increase in oil production by 2 million barrels per day, which is currently scheduled for January.