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Yen jumps after Trump catches COVID-19, rattles financial markets By Reuters

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© Reuters. George Washington is seen with printed medical mask on the one Dollar banknotes in this illustration taken

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By Tom Westbrook

SINGAPORE (Reuters) – The dollar and yen rose on Friday after U.S. President Donald Trump’s positive test for COVID-19 spooked investors, just a month out from November’s presidential election.

Trump said on Twitter that he and his wife Melania had COVID-19 and would begin quarantine and recovery immediately.

The yen made its sharpest gain in more than a month to reach a one-week high of 104.95 per dollar after the Tweet and the greenback rose as much as 0.7% on the risk-sensitive Australian dollar.

Both then pulled back as traders puzzled over how it might affect the election, underscoring market uncertainty around the implications for the November vote.

“The president of the United States has got a disease which kills people. People are de-risking because of that,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.

“But we’re not sure how much this changes the election. The prospect of Donald Trump surviving this is incredibly high,” he said, adding that the selloff could soon reverse.

Losses in the euro () were more modest and it was last down 0.2% at $1.172. The yen pulled back to 105.16 per dollar.

Sterling advanced after Downing Street announced British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen would meet on Saturday to discuss next steps in acrimonious Brexit talks.It was last 0.2% higher at $1.2913 .

The recovered about half its losses by the end of the Asia session and was last down 0.2% at $0.7165. The New Zealand dollar was down 0.1% at $0.6645.

Both lost half a percent against the yen () () but lifted from session lows. U.S. stock futures also pared some losses, though commodities remained under pressure.

Analysts said the next moves would depend on Trump’s health, how far the virus has spread amongst top U.S. officials and politicians and on voters’ response.

“As far as we know Trump is not gravely ill. It is possible that by the time we reach New York trading that markets will have calmed down,” said Yako Sero, strategist at Sumitomo Mitsui (NYSE:) Trust Bank in Tokyo.

“However, this does damage Trump’s ability to campaign and time is running out before the election.”

Against a basket of currencies the dollar tacked on 0.1%, but remains down 0.8% for the week – its softest weekly performance since late August – as hopes for U.S. stimulus have had investors in the mood for riskier bets.

JITTERS

Still, even before Trump’s diagnosis, investors had begun to fret that the hoped-for U.S. fiscal stimulus package had stalled in Washington, and were nervously awaiting U.S. jobs data due at 1230 GMT.

With House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin at odds over what Pelosi described as differences over dollars and values, doubts are now creeping in over whether a deal can be done before the election.

The recovery is also slowing down, and economists expect data due at 1230 GMT to show U.S. hiring increased by 850,000 jobs in September, a smaller gain than August.

Concerns are also growing that coronavirus infection rates are climbing in Europe and the United States.

Madrid will become the first European capital to go back into lockdown in coming days to fight a steep surge in cases.

A record increase in new cases in Wisconsin on Thursday fanned fears of hospitals there being overwhelmed.

“With the President confirmed being positive, this is a reminder to the market that the virus situation is still a problem, “said Bank of Singapore FX analyst Moh Siong Sim.

“Other than that, I’m not sure what it means for the market.”





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WTI Crude Oil Sinks to Fresh Four-Month-Lows

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Crude Oil Price Forecast Talking Points:

  • WTI Crude Oil fell to a fresh four-month-low this morning.
  • This fresh low broke through range support that’s held for the better part of two months.
  • The sell-off has so far found support at a key Fibonacci level plotted around 35.66.
  • The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.

Crude Oil Sell-Off Breaks Range to Set Fresh Four-Month-Lows

The earlier-year break below the zero level looms large in Crude Oil prices, but, for the past two months, WTI has been in a fairly consistent range with about $4 of deviation from support to resistance. The support-side of that range was violated earlier this morning as sellers pushed prices down to a fresh four-month-low, eventually finding some support at a key Fibonacci level.

{{GUIDE| OILTRADINGFUND}}

The price of 35.66 is the 38.2% retracement of the 2020 major move, as taken from the CL2 chart. Given the outlier event of prices breaking below-zero in April, many crude oil charts show obfuscated long-term technical criteria. But, by looking at CL2, which is the next month’s contract rather than the current months, we can strip out that outlier event to, ideally, get a more clear look at what today’s moves mean in terms of the bigger picture. Normally, I’d be hesitant to embark on such retrofitting but, given the outlier event as well as the 50% level from that same Fibonacci study helping to set recent range resistance, I’m a bit more open to following CL2 than I might be otherwise.

Crude Oil Daily Price Chart (CL2)

WTI Crude Oil Daily Price Chart

Chart prepared by James Stanley; CL2 on Tradingview

Taking a shorter-term look at the matter, and Crude Oil prices are bouncing from that Fibonacci support into the prior zone of range support. The prior swing-low that was set yesterday, at around 37.32, could open the door for resistance plays for those looking to trade short-side continuation scenarios. Also of interest for resistance potential inside that zone of prior range support – the October 2nd low at 36.93 could also provide some usable context for bears.

Oil Forecast

Oil Forecast

Recommended by James Stanley

Download our Q4 Oil Forecast

WTI Crude Oil Four-Hour Price Chart

WTI Crude Oil Four Hour Price Chart

Chart prepared by James Stanley; CL2 on Tradingview

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX





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US Election the Main Risk, BoE to Boost QE

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GBP/USDFUNDAMENTAL HIGHLIGHTS:

  • Resurgent USD Pressures GBP/USD
  • US Election the Main Risk, BoE to Boost QE

Resurgent USD Pressures GBP/USD

A marginal drop in GBP/USD to close week with losses stemming from a resurgence in dollar demand as global uncertainties pick-up. Idiosyncratic factors had been somewhat muted for GBP and I for one have rather enjoyed the small amount of headlines regarding Brexit as negotiations are in the tunnel phase. That said, there had been some reports signalling that progress had been made with both parties inching towards a possible early November agreement. In turn, this has helped EUR/GBP crack 0.90 with fresh lockdown measures in France and Germany also adding to the downside, thus the bias is to fade rallies in the cross. Next week, it is expected that both EU’s Barnier and UK’s Frost will come out of the negotiating tunnel on November 3rd and likely provide an update on the latest state of play.



of clients are net long.



of clients are net short.

Change in Longs Shorts OI
Daily -15% 8% -4%
Weekly -6% -17% -12%

US Election the Main Risk, BoE to Boost QE

The obvious risk in the very short-term is the US election, in which the outcome will guide sentiment, thus while there are key domestic factors for the UK, taking the specific events in isolation, volatility will be dwarfed by the election. That said, the Bank of England will be on tap, where expectations are for an increase in QE by £100bln. At the current purchase rate, a £100bln increase can see gilts until H1 2021. However, focus will also be on whether the committee has lowered the bar any further for taking rates sub-zero.

Gilt purchases

Lockdown Measures in London is a Question of When Not If

Another factor that GBP has to contend with is the continued rise in coronavirus cases with PM Johnson on under increasing pressure to implement fresh lockdown measures. In turn, with the r-rate in the capital showing little signs of easing, further measures in London is a question of when, not if.





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Euro Shrugs Off Strong Growth in Germany, Heads for Two-Month Slump By Investing.com

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© Reuters.

By Yasin Ebrahim

Investing.com – The euro fell sharply against the dollar Friday and is on course for a second straight month of declines for the first time since February, as investors fear strong quarterly economic growth in Germany will prove transitory as the spread of the virus gathers pace.

fell 0.25% to $1.1646.

German GDP rose 8.2% in the third quarter, topping economist forecast for a rise of 7.3%, led by a rise in consumer spending as well as investment in machinery and exports.

Looking ahead, however, Europe’s growth engine is unlikely to see a repeat in the fourth quarter as the second wave of the virus has forced the country into another lockdown starting Monday.

“[A]ccording to our estimates, the state-ordered closure of restaurants, pubs, hotels, theaters, cinemas etc. as well as stricter regulations for retailers will cause GDP to fall by 1% in the fourth quarter,” said Commerzbank (DE:).

“We have assumed that the lockdown will end at the end of November …  but since new infections usually react to a lockdown with a delay and the government wants to see progress in this area, the restrictions could also affect December,” it added.

Infection in Germany have topped 500,000 after an increase of 19,409 in the 24 hours through Friday morning.

As well as an expected dip in German GDP, expectations that the European Central Bank will mount a massive stimulus-response in December will also ensure any strength in the euro is fleeting.

“ECB President Christine Lagarde sent a crystal-clear message that: further stimulus will be announced in December, and there will be a package of measures,” Marco Valli, head of macro research at UniCredit, said in a note, according to CNBC.

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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