For the most part, global sentiment ended on an upbeat despite US President Donald Trump contracting the coronavirus. The Dow Jones, S&P 500 and Nasdaq Composite climbed over the past 5 trading sessions. The ‘risk-on’ tone greatly benefited the sentiment-linked Australian Dollar at the expense of the haven-oriented US Dollar as anti-fiat gold prices cautiously recovered.
September’s non-farm payrolls report missed expectations, with a drop in the labor force participation rate perhaps accounting for some of the declines in unemployment. This does fall in line in with what has been increasingly less-optimistic data surprises from the US since July. That has in turn placed great focus on prospects of additional fiscal stimulus.
While the House of Representatives passed the $2.4 trillion bill last week, it was on party lines, perhaps lowering the odds of it pushing past the Senate. This may be a recipe for disappointment in financial markets with FOMC minutes due this coming week. There the Fed may reiterate some of its cautious commentary on the economic outlook.
Brexit headlines also remain in the spotlight as the transition period inches closer towards its end this year. That is a catalyst for Sterling and FTSE 100 volatility. Speeches from Fed Chairman Jerome Powell, ECB President Christine Lagarde and BoE’s Governor Andrew Bailey are also in store next. Crude oil prices have been on the decline, now facing the latest OPEC world outlook.
Gold prices may retreat if uncertainty around government lockdown orders, the vice-presidential debate and ongoing fiscal stimulus talks undermine global growth and