Australian Dollar

Its risk off as Wall Street and European stocks took a tumble, started first by an underwhelming IFO survey in Germany followed by continued outbreaks and new record high cases of COVID-19 in the US and Europe alike.

Via Credit Suisse: With rate cuts and QE expansion now well priced in for the 3 Nov RBA meeting, we see reduced potential for idiosyncratic AUD weakness going forward.

Wall Street had a mild finish to the week with European stocks outperforming.

DXY was down Friday night: Australian dollar was up: Gold fell: Oil fell: Metals too: Miners are trending off: EM stocks are ready to blow: Junk is OK: Treasuries gave up the insane steepening: Stocks were up a bit: We find ourselves at another very strange, very stretched moment in this crazy pandemic.

Via Bill Evans at Westpac: Our views on the likely decision by the RBA on November 3 have been clear since our note on September 23.

Wall Street was able to find some confidence overnight even though there was still no progress on fiscal stimulus measures.

Risk sentiment is trending down again today here in Asia following the repeated unease on Wall Street overnight, going into the last US presidential “debate”.

In his recent Lowy Institute commentary, RBA alumnus John Edwards demanded MOAR: Just as the Australian government has little choice but to continue for some time with the expansionary fiscal stance it adopted in response to the pandemic, so too the RBA has little choice but to continue its expansionary monetary stance.

The Australian dollar is down sharply this morning after last night’s leap: Bonds are bid except way out past the RBA’s QE horizon: XJO is off sharply: Big Iron is mixed: Big Gas bashed: Big Gold still can’t break the corrective trend: Big Banks have reversed the recent gains: US futures are weak.

Risk sentiment remains tenuous across the North Atlantic overnight with Wall Street stumbling and European stocks almost in full retreat as the triple whammy of COVID, Brexit and the upcoming US elections weigh on markets.

Risk sentiment is generally solid today here in Asia with mainland Chinese shares the only fly in the ointment as Yuan contineus to advance.

Corss-posted from FTAlphaville: A European Central Bank research paper on the feasibility of the digital euro has garnered a lot of attention over the past couple of weeks.

With less than two weeks to go until the US elections, risk markets are still swayed by any hopium around a further stimulus package from Congress, with further talks overnight pushing markets and then post-close futures this morning.

Risk sentiment is very wobbly today here in Asia with Chinese shares just holding on to scratch sessions while the rest of the region sells off slightly in response to the harsher falls on Wall Street overnight.

The lack of any economic reports and any action of further stimulus measures from the US sent Wall Street and other risk markets lower overnight, as we head into the usually volatile late October period leading up to the US presidential election.

As the trading week starts again, risk sentiment has finally found some support outside China, which had to absorb the latest declining GDP print.