Weekly Market Commentary commencing 5th October 2020

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US and European markets experienced a ‘flash-crash’, after it was announced that President Trump tested positive for the coronavirus. A panic selling hit US futures and spiked the safe-haven US Dollar. As markets digested the news, they also recovered, aided by news that the Pelosi led House was considering further actions. This was led by possible bailouts for the Airline industry, following 32,000 layoffs, within the industry. By the close of trade stock markets were lower, but only marginally, while the currencies all but returned to the status quo.

October is often an eventful month and this is the month before the November 3rd Presidential Election, so expect volatility and fireworks. Non Farm Payroll was all but overlooked during the melee, but missed expectations, although the headline Unemployment rate fell to 7.9%. This is the final report before the election. The University of Michigan Economic Sentiment report saw a rise, jumping to 80.4, reflecting the surging US economy.

The volatility on markets forced the trade exposed currencies lower, but the recovery by close of trade allowed the AUD to trade above 0.7150, while the NZD settled back to 0.6640. Markets will continue to focus on the Presidential election in the US and the economic consequences of possible scenarios. The virus will continue to emote.

Collinson & Co Contact