Morning Report – Thursday 8th October

Main Headlines

The US Coronavirus response was the main talking point at last nights Vice Presidential debate. In contrast to last weeks chaos, the debate was marred by both candidates side-stepping questions. The event is unlikely to make any lasting impression on voters and should not affect the polls ahead of the election.

FOMC minutes for the meeting in mid-September were released yesterday. Investors will not be buoyed by the news that the Fed offered very few clues to its new monetary policy guidance. The Fed made no “unconditional commitment” to near zero interest rates regardless of economic conditions.

David Frost and Michel Barnier spoke yesterday of a need for compromises as Brexit talks continue to stall this week. Frost told the House of Lords that the UK is willing to discuss commitments on state-aid policy, while his counterpart Barnier urged member states for flexibility on fishing rights.

GBP

The pound is trading relatively flat against most major currencies this morning. Brexit talks continue today with a sense of renewed optimism as both parties have stressed that compromises will be necessary. Bank of England Governor Andrew Bailey will also speak in a panel discussion.

EUR

The euro is trading relatively flat against the dollar and pound this morning. ECB minutes released today, will be scoured to see how officials will attempt to tackle deteriorating growth and inflation and whether monetary stimulus is on the cards. Investors will also look to rising Coronavirus cases in the continent, as France and Spain posted record increases in cases yesterday.

USD

The dollar has fallen against most major currencies in early morning trading today due to Nancy Pelosi and Steve Mnuchin signalling in principle that an airline-relief bill could be agreed. Donald Trump pulled his negotiators from broad stimulus talks, but individual stimulus packages will be negotiated this week and next with airline relief as the main focus.

Main Economic Data/Central Banks/Government (All times BST)
7:00 a.m.: Germany Aug. Trade Balance
8:25 a.m.: BOE’s Bailey, ECB’s Schnabel in panel discussion
9:00 a.m.: ECB’s Guindos speaks
9:20 a.m.: ECB’s Cos speaks
11:15 p.m.: ECB’s Mersch speaks
1:30 p.m.: ECB August Minutes
1:30 p.m.: U.S. Initial Jobless Claims

OPEC World Oil Outlook