Daily Market Commentary 2nd October 2020

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The rally seen on equity markets appears to have run out of steam, as hopes of Congressional action for a further bailout package/stimulus, faded. The losses suffered in equities in September were almost eliminated by a big rebound in markets and sentiment towards the end of the month, which has seen the safe haven US Dollar lose it’s shine. The EUR has progressed to 1.1740, despite a rise in the EU Unemployment rate, while the GBP traded 1.2880.

The flagging reserve has allowed the trade exposed commodity currencies to regain some lost ground. The AUD traded 0.7180, despite softer manufacturing data, while the NZD pushed back to 0.6640. The all important Japanese Tankan report, was an improvement on the losses suffered in the previous six quarters, although remains deeply in the red. The Tankan had corpora and manufacturing sentiment at an 11 year low, so this improvement has been welcomed.

Hopes surrounding a stimulus in the US are disappearing quickly , while attention will now turn to the important Non Farm Payrolls, released tonight. US employment has been strong and the economy is improving, in the lead up to the US Presidential elections, which will be a defining moment for markets.

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