Morning Report – Tuesday 27th October

Main Headlines

Amy Coney Barrett was officially confirmed to the Supreme Court in a hearing yesterday. The vote was in line with the expected 52-48 party line and now cements the 6-3 Conservative majority. She will most likely be involved in future votes on Obamacare and Abortion rights.

The possibility of a pre-election stimulus bill took another blow yesterday as Nancy Pelosi and Steve Mnuchin failed to resolve major differences on a national virus testing and tracing plan. Although the bill is still possible, the general consensus is that it is unlikely to happen.

Global equities were in the red yesterday on fears that rising Coronavirus cases and a lack of fiscal stimulus could lead to another global recession. S&P 500 and Dow Jones dropped nearly 3% in a day which led to three-week lows. Asian stocks also tumbled to add uncertainty and signal a risk-off mood.

GBP

Sterling is trading relatively flat against both the dollar and euro this morning. Boris Johnson faces a revolt of 50 Conservative MPs over a clear route out of lockdown for Northern Britain, as there is currently no exit plan. The day is light on the economic data front, as well as no central bank speakers.

EUR

The euro is rising against the dollar in early morning trading. EU countries continues to deal with rising COVID-19 cases and the WHO have said that they may need to use other measures to stem the flow of the virus. A senior ECB official, Pablo Hernandez de Cos is also set to speak this afternoon on the strength of the eurozone economy.

USD

The dollar is relatively flat against most major currencies including the Japanese Yen. With the US election only seven days away, mail-in ballots are being cast, and in some states have already surpassed 2016 numbers. In Texas, 7.4 million people have already voted which is 80% of the total votes cast in 2016. The day is light on the economic data front, and attention will be turned to the failing stimulus bill and election campaigning.

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

7:45 a.m.: France Sept. PPI
8:00 a.m.: Spain 3Q Unemployment
9:00 a.m.: Euro-Area Sept. M3 Money Supply
10:00 a.m.: Italy, U.K. sell bonds
11:00 p.m.: France 3Q Total Jobseekers
11:00 p.m.: U.K. Oct. CBI Retail Sales
11:30 p.m.: U.K. sells bonds
3:00 p.m.: ECB’s de Cos speaks