Market Update - 21st October 2020 - All Eyes On Huge U.S Stimulus Bill
Nancy Pelosi Stimulus Package:
Focus shifts to the U.S this week where the market is hoping to see a huge stimulus package agreed on between Nancy Pelosi/House Democrats and the Trump Administration. The House of Reps led by the Democrats have already passed $2.2 trillion in spending, but the bill is stuck with Mitch McConnell and Senate Republicans who are holding up the stimulus package for political reasons. Negotiation's are ongoing and it's understood that Republicans have suggested $1.9 trillion as a number they'd support. Should Dems agree the package could become law as soon as this weekend and it would provide a huge shot in the arm for the ailing U.S economy that has been ravaged by Covid. The bill would likely also spur stock markets and risk assets such as the Aussie Dollar.
AUD Creeping Lower:
The Aussie Dollar fell with U.S equities yesterday and is off around half a percent across the board since my last morning report on Monday. As suggested above U.S stimulus negotiations are the biggest catalyst for the Aussie Dollar this week and markets more broadly, as such their isn't a great deal to talk about.
UK CPI is due out tonight, followed by a speech from ECB President Lagarde.
The local stock market had a bad day yesterday, but a positive finish on Wall Street overnight sets us up for a better day today.
AUD EXCHANGE RATES:
AUD/USD – 0.7010
AUD/GBP – 0.5413
AUD/EUR – 0.5930
AUD/NZD – 1.0683
AUD/JPY – 74.029
OTHER MARKETS:
All Ords (XAO) – 6,396
Gold – A$2,706/oz
Silver – A$35.01/oz
Oil – US$41.23 barrel
DATA RELEASES TODAY:
GBP - UK CPI due at 5:00pm
EUR – ECB President Lagarde Speaks at 6:30pm
Senior FX Manager
Compass Markets
Contact Patrick for a quote on 0431 278 632.
*Above rates are indicative wholesale rates and intended as a guide only. Commentary above is my opinion and should not be construed as financial advice. I recommend you seek professional advice before doing anything of a financial nature.