Morning Report – Monday 2nd November

Main Headlines

Boris Johnson announced on Saturday evening that the UK would be entering a “Tier 4” full scale lockdown from Thursday 5th November for four weeks. The Prime Minister said that he could not ignore the projections compiled by England’s Chief Medical Officer Chris Whitty.

The US election is one day away, and more than 92 million votes have already been cast according to the US Elections Project. Trump travelled to five states on Sunday for eleventh-hour rallies, in a last ditch attempt to gain ground on Biden who is 7.2 points ahead of him in national polls.

The Eurozone economy is expected to shrink by 2.3 percent in the fourth quarter according to a consensus of economists. Most institutions had previously forecasted positive growth, but with rising Coronavirus cases and most major economies going into lockdown, economic growth in the bloc is now expected to fall.

GBP

The pound is falling against the euro and dollar in early morning trading today. Boris Johnson’s announcement over the weekend will be debated by MPs over the coming days with an emphasis on the exit-point on 2nd December. Michael Gove said yesterday that the lockdown could last beyond that point, well into the Christmas period. There was also progress made in Brexit negotiations over the major sticking point of access to UK fishing waters.

EUR

The euro is relatively flat against the dollar this morning. The Eurozone has been overshadowed somewhat by huge developments in the UK and the US, with the upcoming election over the weekend, so it is unlikely that economic news in the continent will affect the euro heavily. Manufacturing PMIs for a host of European economies are released this morning, but are unlikely to surprise to the downside.

USD

The dollar is relatively flat against most major currencies this morning, but is trading lower against the Japanese Yen. Joe Biden leads in national polls, but the race remains very close in key battle grounds states such as Florida and Pennsylvania – the election could come down to electoral college votes just like in 2016.

Main Economic Data/Central Banks/Government (All times GMT)

6:00 a.m.: Russia Oct. Manufacturing PMI
7:00 a.m.: Turkey Oct. Manufacturing PMI
8:15 a.m.: Spain Oct. Manufacturing PMI
8:45 a.m.: Italy Oct. Manufacturing PMI
8:50 a.m.: France Oct. Manufacturing PMI
8:55 a.m.: Germany Oct. Manufacturing PMI
9:00 a.m.: Euro-Area Oct. Manufacturing PMI
9:30 a.m.: U.K. Oct. Manufacturing PMI