Markets closed a tumultuous week, much lower, after a surge in the virus across Europe and the USA. Added to the ‘Witches Brew’ is the all important US Presidential Election. European countries have been inundated with virus infections and have reacted with various stages of lock-downs. This is crippling for the economy and ignores the orthodox plan to combat the virus. European markets were reopening and economic data has reflected this, although the current lock-downs will smash the economic recovery. EU GDP has jumped 12.75 for the last Quarter, but is likely to head negative, if the lock-downs continue.
The US has also been hit hard by the virus, but the President refuses to lockdown. The stock markets have been hit with a major correction, because of the virus and uncertainty leading into the Presidential election. Investors have been keen to take money off the table until the election is decided. The USD Dollar has spiked with the uncertainty as a safe haven play. The EUR has fallen back to 1.1640, while the GBP trades 1.2950, while negotiations over a post-Brexit trade deal deadline is extended.
The US election is now the focus of markets, in what is a massive Tuesday 3rd of November, along with the RBA Rate Decision and the Melbourne Cup! Commodity currencies suffered the resurgent reserve, with the AUD falling back to 0.7020, while the NZD is testing 0.6600. The US election will determine the currency direction, along with equities and bonds.