Daily Market Commentary 1st October 2020

US Equity markets surged again overnight, brushing off the profit taking, in the previous session. Economic sentiment is improving rapidly, regaining some of the lost ground in September, while October looms with many questions in a month reputed for drama. The growing economic confidence is reflected in the statistics, with the ADP Job report confirming private sector jobs, are much higher than expected. Pending Home Sales surged 8.8%,  confirming the boom in the housing markets, a leading sector. The surge in confidence pushed the US Dollar lower, with the GBP jumping to 1.2900, while the EUR trades 1.1715.

The Presidential Debate was a blockbuster and confirmed the dominance of the President. Markets will be attracted to a Trump re-election as lower taxes and further deregulation are fuel for strong markets. The real concern over the US election is the lack of a result, which came up in the debate, which would prevent an outcome on the night!? The flagging reserve allowed the trade exposed commodity currencies to regain further lost ground, with the AUD jumping to 0.7150, while the NZD broke back above 0.6600.

NZ also held a leadership debate, which had little impact on markets and the currency. The NZ election will impact the currency, but polls continue to reaffirm the status quo, albeit in the slightly changed composition.