Europe To Start Higher As Trump's Health Improves
Fiona Cincotta October 5, 2020 2:44 PM
European bourses are opening on the front foot as President Trump’s condition improves. Speculation is growing that Trump could be discharged as early as today
European bourses opening on the front foot as President Trump’s condition improves. Speculation is growing that Trump could be discharged as early as today. We know that the markers hate uncertainty. The latest headlines are providing more clarity surrounding the health of the President and are easing the political uncertainty which has clouded over the markets since Trump was taken ill. Risk appetite is on the rise meaning that risker assets such as stocks are well supported in early trade on Monday, whilst safe havens such as the US Dollar and Gold are out of favour.
Doctors are saying that they are pleased with Trump’s progress proving some relief to the financial markets. Trump contracted covid with just one month to go until the US Presidential elections adding another layer of uncertainty to elections which saw the two candidates, Jo Biden & Trump, close in the polls. Furthermore, Trump had raised doubts over whether he would accept the result of the elections.
Today sees the release of global services PMIs. Whilst manufacturing has made an impressive recovery from the April’s contraction, service sectors, particularly in tourist destinations such as Spain and Italy are seeing the recovery wobble. Even France and German saw service sector activity back in contraction territory in the flash reading for September.
In the UK the service sector remains resilient for now. The dominant service sector saw activity expand quickly in August hitting 58.1 The more recent flash September reading printed at 55.1, slightly down from August’s peak but still a very strong number. Should Thursday’s print confirm 55.1 then Q3 will have seen an impressive expansion. However, there is a chance that the government’s most recently announced tightening of lockdown restrictions, including a curfew and new social distancing rules could knock confidence, hitting the PMI index.
Brexit talks to continue
Brexit optimism is underpinning the Pound and could provide support to the more domestically focused FTSE 250. Boris Johnson holding talks with EC President Ursula von der Leyen appears to have injected at least a bit more political momentum into talks, which will now continue this week, after little progress last week. As the clock continues to tick towards the government’s self imposed October 15th deadline ther is a growing sense of urgency between the two sides, which could be the key ingredient to a trade deal actually being done.
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.