Europe Starts Firmer Ahead of Potentially Volatile Week
Fiona Cincotta September 28, 2020 3:26 PM
European bourses are seeing an upbeat start to the week, boosted by a strong close on Wall Street on Friday, on hopes of further stimulus and encouraging data from China.
European bourses are seeing an upbeat start to the week, boosted by a strong close on Wall Street on Friday, on hopes of further stimulus and encouraging data from China. Risk on trading is boosting demand for equities, whilst the safe haven US Dollar slips away from its 2 month high.
Late on Friday the US Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi agreed to start formal talks on a new coronavirus rescue package. There had been growing fears that with the US elections under 2 months away the two sides would struggle to reach a fiscal stimulus agreement; stimulus which is badly needed a the US economic recovery shows signs of stalling and the recovery in the labour market could even be reversing.
This week is set to be a BIG week for event risk with Brexit talks, the first Biden – Trump live debate for the Presidential elections along with a slew of data culminating in US non-farm payrolls. Volatility could be back with a bang this week.
The Pound is starting the week on the front foot amid mildly improving Brexit sentiment. The mood music surrounding trade talks has improved, which is offering its support to the Pound. In the absence of any high impacting UK data today, all eyes will be on Brexit headlines as Michael Gove meets with European Commission Vice President Maros Sefcovic. The Internal Markets Bill still casts a shadow over talks. However, the fact that the EU hasn’t broken away from negotiations yet is encouraging. Frost’s negotiating team also reportedly say that a deal will be agreed. The clock is ticking towards the British government’s self-imposed deadline of 15th October so Brexit headlines will take on even more importance than before.
Rising covid cases in Europe and the UK and the threat of tighter restrictions could keep any gains in Europe in check. With covid cases in the UK up 46% in a week and London on the brink of another lockdown, the next 6 months look set to be challenging for business across the board.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.