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Investors’ bets on a Democratic sweep grow after Biden debate performance By Reuters

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© Reuters. FILE PHOTO: Joe Biden gives a thumbs up in Delaware

By April Joyner and David Randall

NEW YORK (Reuters) – The debate between Democratic presidential candidate Joe Biden and President Donald Trump, marred by frequent interruptions and name-calling, did little to enlighten the electorate. But it was enough to turn the consensus on Wall Street toward Biden.

The fractious Sept. 29 faceoff led to a jump in Biden’s lead over President Donald Trump in several national polls, fueling moves in a broad range of assets sensitive to a decisive Democratic victory, from clean energy companies and U.S. govenrment bonds to foreign exchange derivatives that hedge against market volatility.

A second debate – which may be delayed or not take place at all – “is critical for the president, but I don’t think it matters at all to Biden. He can coast to the election,” said Jamie Cox, managing partner for Harris Financial Group.

The former vice president opened up a 10-point advantage among likely voters in an Oct. 3 poll by Reuters/Ipsos, a 1 to 2 point increase over his previous lead, following the presidential debate.

Despite the skepticism about opinion polls after Trump’s surprise win in 2016, investors have since increased bets that the Democrat will have a clearcut victory.

“Our highest probability is of a Biden win and a Democratic sweep and that keeps increasing,” said John Briggs, Americas head of strategy at NatWest Markets. “We had some client pushback on that idea but after the debate that turned around quite a bit.”

Graphic: Betting markets : Biden’s lead – https://fingfx.thomsonreuters.com/gfx/mkt/qmyvmbzwdpr/Pasted%20image%201602189822327.png

Shares of alternative energy companies, which analysts expect to prosper from policies under a Biden administration, have climbed sharply since the debate.

In currency markets, bets on post-election volatility are waning – evidence of investors positioning for a strong win for the Democrat. In Treasury markets, a bout of selling on expectations of a hefty Biden-led stimulus package has helped send yields to their highest levels in months.

“Pence delivered his messaging better than Trump, but I want to see how Trump performs in the next debate,” said Akira Takei, global fixed income fund manager at Asset Management One in Tokyo, after Wednesday’s vice presidential debate between Mike Pence and Kamala Harris. “It may appear that Biden has the lead, but I don’t trust the opinion polls.”

    A Biden victory is far from a foregone conclusion, and investors continue to hedge their bets. The Democratic candidate’s widening lead, for example, has done little to dispel expectations of post-election volatility in stock options, which continue to anticipate market swings persisting into the end of the year.

“The (options) market is just pricing in that question mark,” said Jon Cherry, global head of options at Northern Trust (NASDAQ:) Capital Markets in Chicago.

Investors also remain on guard against possible reversals in sentiment in the race. Robert Phipps, director at Per Stirling Capital Management in Austin, Texas, is holding around a fifth of his portfolio in cash.

“Those polls measure the popular vote,” Phipps said. “The popular vote doesn’t decide the presidency.”

Graphic: Positioning for U.S. election volatility – https://graphics.reuters.com/USA-MARKETS/BIDEN/azgpoaodapd/chart.png

A basket of stocks tracked by JPMorgan Chase (NYSE:) & Co, which includes green technology and trade-linked companies that would likely benefit from Democratic policies, has outperformed a basket of companies that could be hurt by a Biden presidency by about 10% between early September and Wednesday, according to a Reuters analysis.

Per Stirling’s Phipps said his portfolio’s biggest winners had been in the alternative energy space. “Every time Biden’s poll numbers go up, those investments go up,” he said.

The rising probability of a Democratic takeover of Washington by winning the presidency and control of the Senate has also helped push U.S. Treasuries out of a range in anticipation of Democrats passing a broad stimulus plan..

Yields on benchmark 10-year Treasuries could rise as high as 1.25% with a Biden victory, up from its current level around 0.75%, NatWest’s Briggs said.

Graphic: The Biden bump – https://fingfx.thomsonreuters.com/gfx/mkt/yxmvjbaxavr/Pasted%20image%201602189648995.png

“There’s a narrative in Treasuries that there’s a greater chance of a blue sweep, which means that a stimulus package will come January or February,” said Greg Staples, head of fixed income at DWS Group.

At the same time, implied volatility in the currency markets – a measure of how much investors expect spot prices to move in a given time frame – are falling, suggesting that markets now believe there is a lower chance that the election result will be disputed or drawn out..

“Markets don’t see much risk of a serious electoral challenge if Biden looks to be winning with a decisive lead – too many state outcomes would have to be reversed,” said Steve Englander, head of global G10 FX research at Standard Chartered (OTC:) in New York, in a note to clients.





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China to set five-year plan for steering economy through choppy waters By Reuters

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© Reuters. FILE PHOTO: Containers are seen at the Yangshan Deep-Water Port in Shanghai

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By Kevin Yao

BEIJING (Reuters) – China’s top leaders will chart the country’s economic course for 2021-2025 at a key meeting starting on Monday, seeking to balance growth and reforms to avoid stagnation amid an uncertain global outlook and deepening tensions with the United States.

President Xi Jinping and members of the Central Committee, the largest of the ruling Communist Party’s elite decision-making bodies, will meet on Oct. 26-29 behind closed doors to lay out the 14th five-year plan, a blueprint for economic and social development.

The plan and its execution will be crucial for China to avoid the so-called “middle income” trap, policy insiders say, referring to the struggle of many economies to boost productivity and shift towards higher value-added industries.

“Although the Chinese government has been calling for a transition in the development model for a number of years, we think the next five years will be particularly important, both politically and economically,” Goldman Sachs (NYSE:) economists wrote in a note ahead of the plenum, the fifth meeting of the Central Committee since the 2017 party congress.

Sustaining steady growth will be the priority, even as expectations grow that top leaders could announce fresh reforms to spur domestic demand, innovation and self-reliance under Xi’s new “dual circulation” strategy, policy insiders said.

Investors also will be closely watching to see if China moves to a more flexible economic growth target, after dropping it this year for the first time since 2002 due to the uncertainty caused by the coronavirus crisis. Some analysts say dropping growth targets would reduce the country’s reliance on debt-fueled stimulus and encourage more productive investment.

China, where the COVID-19 outbreak first emerged, has mounted a robust economic rebound after quashing the domestic spread of the virus, but global prospects remain gloomy and the pandemic has added to tensions with the United States.

“China’s potential growth rate will slow further due to the aging population, weakening effects from investment in driving growth and diminishing dividends from globalisation,” said Tang Jianwei, senior economist at Bank of Communications.

“To reverse the slowdown, we need deep-rooted reforms.”

Policy sources have told Reuters that China’s leaders are set to endorse a lower growth target compared with 2016-2020.

Government think tanks and economists have made recommendations for average annual gross domestic product (GDP) growth targets including “around 5%”, 5-5.5% to 5-6%, the sources said.

The plan to be discussed and approved by leaders next week is expected to be unveiled at the annual parliament meeting in early 2021.

“We need to maintain a balance between development, stability, and risk prevention,” said a policy insider. “Macro adjustments will be more difficult and this will present a test for policymakers.”

INWARD SHIFT

Xi’s strategy to guide the next phase of development, which points to an inward economic shift, has fanned calls by government advisers for reforms to unleash domestic growth drivers, including loosening curbs on residency and land rights and boosting household incomes.

Speeding up reform of the household registration “hukou” system would enable migrant workers to enjoy more social welfare benefits, while land reform would enable farmers get a bigger share of the gains from land deals. Both measures would spur urbanisation and consumption.

Expected moves to further free up interest rates and expand the role of capital markets would address distortions in credit allocation that see huge state banks lend to state companies while the private sector is often deprived of credit.

Chinese leaders are also expected to discuss further plans to curb greenhouse gas emissions and ease reliance on imported technology, especially semiconductors, as Washington squeezes Chinese tech giants including Huawei Technologies Co and Semiconductor Manufacturing International Corp (HK:).





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China imposes anti-dumping measures on U.S., South Korea, EU rubber imports By Reuters

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BEIJING (Reuters) – China’s Ministry of Commerce said on Friday that it will impose temporary anti-dumping measures on some rubber imports from the United States, South Korea, and the European Union from Oct. 28.

Beijing will impose anti-dumping deposits on ethylene propylene diene monomer rubber imports from the countries and region, the ministry said in a statement on its website.

The measures follow an investigation launched in June 2019.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Australia corporate regulator ‘very alive’ to allegations against Crown Resorts By Reuters

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© Reuters. FILE PHOTO: Australian billionaire James Packer, co-chairman of Melco Crown Entertainment, attends a news conference at Melco Crown’s Studio City in Macau, China

2/2

By Byron Kaye

SYDNEY (Reuters) – Australia’s corporate watchdog said on Friday it was “very alive” to alleged failures of corporate governance at casino giant Crown Resorts Ltd (AX:) raised at a regulatory inquiry, and that it may open its own investigation.

A gambling regulator inquiry in recent weeks has heard Crown’s directors and one-third owner James Packer admit to issuing misleading public statements, giving Packer confidential trading information despite having no formal role and failing to act on warnings that could have stopped company staff from being jailed in China in 2016.

The inquiry has also heard that Crown’s former chairman has declined to cooperate.

“We’re certainly very alive to the matters that are being covered by that inquiry, we are watching that carefully,” Cathie Armour, head of financial services and corporate regulation at the Australian Securities and Investments Commission (ASIC), told a parliamentary hearing.

“We have seen the reports that there may potentially be a referral to us,” she said. “If there is a referral made to us, we of course will go and investigate the matter further.”

Australia’s financial crime agency said this week it was investigating Crown over suspicion it failed to comply with anti-money-laundering protocols at its Melbourne casino.

ASIC has previously declined to comment on the inquiry, which was set up to decide if Crown should be allowed to keep its license to operate a casino in Sydney, where it plans to open a A$2.2 billion ($1.6 billion) resort in December.

At the parliamentary hearing on Friday, ASIC’s Armour said the regulator’s “approach is not to comment on matters that we may be considering in a broader investigative sense”.

At its annual general meeting on Thursday, shareholders voted against Crown’s remuneration report, giving them the right to remove its board if there is a similar vote next year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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