Archives of “October 2020” month

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PBOC hinting the 6% drop in USD/CNY since the end of May is enough, for now

  
Analysis, Forex

Posting this on the People’s Bank of China as an ICYMI, if you are trading yuan please check it out.

Justin broke the news yesterday of the PBOC asking banks to suspend the use of the counter-cyclical factor in its daily yuan midpoint fixing.
Check out the chart below for the extent of yuan gains since May, if these keep on China’s export performance will suffer. I think its well worth paying attention to this story and we are about to see greater two-way movement of the yuan ahead. Recall also the PBOC moved in early October to make selling yuan forward cheaper. This new development builds on that. (PBOC has lowered the reserve requirements on some forward yuan FX trading.)
Posting this on the People's Bank of China as an ICYMI, if you are trading yuan please check it out.

Germany is discussing a two-week coronavirus shut down

  
Analysis, COVID-19

The German government pondering a 2 week lockdown, closing all but essential retail/services, kindergartens, schools

Earlier news France is considering similar:

  • French President Macron will address the nation on Wednesday evening
  • France said to be considering a month-long coronavirus national lockdown

Neither the French nor German shut downs as mentioned above are confirmed, these are the various media reports doing the rounds.

NASDAQ close higher, but S&P and Dow close near session lows and negative on the day.

  
Analysis, US Market

Dow closes lower for the 3rd straight day

The major indices are closing mixed with the Dow taking the brunt of the selling. The Nasdaq index closed higher ahead of Microsoft’s earnings.

Highlights:
  • Dow and S&P closed near session lows
  • Dow post 3 day losing streak
  • NASDAQ close higher for the 3rd time in 4 days
  • Dow close that the lowest level since September 29 and 7% off all time highs
  • S&P and NASDAQ close 5% off the all-time highs
The final numbers are showing:
  • S&P index fell -10.28 points or -0.30% at 3390.69
  • NASDAQ index rose 72.415 points or 0.64% at 11431.35
  • Dow fell -222.19 points or -0.8% at 27463.19
Microsoft earnings are out and they beat on the top and bottom lines;
  • Earnings-per-share came in at $1.82 vs. $1.54 estimate
  • revenues came in at $37.15 billion vs. an estimate $35.75 billion
  • intelligent cloud came in at $12.99 billion vs. 12.72 billion estimate
  • productivity and business processes came in at $12.32 billion vs. expected $11.79 billion
  • more personal computing came in at $11.85 billion vs. expected $11.17 billion

Supreme Court ruling and Trump’s latest comments highlight contested election risk

  
  Analysis

Supreme Court rules that main-in votes received after the deadline won’t count

Supreme Court rules that main-in votes received after the deadline won't count
The US Supreme Court ruled late yesterday on what could be a decisive factor in the US election. They said the mail-in votes post-marked on or before the election wouldn’t count if received after Nov 3.
A district court had mandated a six-day extension to retrieve slow-arriving mail but the 5-3 decision along ideological lines rejected that. In writing for the majority, Kavanaugh said that “suspicions of impropriety” will result of “absentee ballots flow in after election day and potentially flip the results of an election.”
Kagan dissented and said there is no result to ‘flip’ until all valid votes are counted and that nothing would be more “suspicious” or “improper” than refusing to tally votes once the clock strike midnight.
In a sign of what could be to come, Trump latched onto the idea today and said:
“It would be very very proper and very nice if a winner were declared on November 3rd, instead of counting ballots for two weeks, which is totally inappropriate and I don’t believe that that’s by our laws. I don’t believe that. So we’ll see what happens.”
If Trump tries to declare an early victory and it ends up in the Supreme Court, today’s decision is a sign of what’s to come.
Even if he’s well-behind on election night or afterwards, the market will be hesitant to move until he concedes. There’s a material risk that he never concedes.

(more…)

European equity’s end the session lower

  
Analysis, Global Indices

Spain’s Ibex falls over 2%

The major European equity indexes are ending the session lower. The biggest decliner is Spain’s Ibex which fell over 2% on the day.

The final numbers are showing:
  • German DAX, -0.93%
  • France’s CAC, -1.77%
  • UK’s FTSE 100, -1.09%
  • Spain’s Ibex, -2.14%
  • Italy’s FTSE MIB, -1.53%
in other markets as London/European traders look to exit:
  • spot gold is trading up $7 or 0.37% $1909.20
  • spot silver is up $0.16 or 0.66% at $24.44
  • WTI crude oil futures are up $0.96 or 2.49% $39.52

EU warns there won’t be enough vaccines for the whole EU population by end-2021

  
  Analysis

That’s depressing

This is a Reuters report, citing sources. It’s not surprising if you have been following the numbers.
It will be a big leap forward if we can get the elderly and healthcare workers vaccinated. I also expect that a large part of the population won’t want the vaccine so all those who want it will probably get it before the end of 2021.
That should get things pretty close to normal.
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