Riskier Assets Find Support, with China Stats, COVID-19, and U.S Politics in Focus

Earlier in the Day:

It’s was a particularly busy start to the day on the economic calendar this morning. The Japanese Yen was in action early on, with economic data from China also in focus. Away from the economic calendar, U.S politics and COVID-19 were also in focus.

Positive chatter from Capitol Hill and hopes of a COVID-19 vaccine supported riskier assets early on.

Nancy Pelosi raised hope of a pre-Election Stimulus Bill over the weekend, while also setting a deadline for talks.

At the end of last week, U.S Pharma Phizer talked of having a COVID-19 vaccine ready before the end of the year.

For the Japanese Yen

Japan’s trade surplus widened from ¥248.6bn to ¥675.0bn in September. Economists had forecast a widening to ¥989.8bn.

According to figures released by the  Ministry of Finance,

• Exports fell by 4.9% when compared with September 2019.
  • Exports to China jumped by 14.0%, while down by 2.0% to Asia.
  • Exports to the U.S rose by just 0.7%, while exports to Western Europe fell by 6.4%.
• Imports tumbled by 17.2% when compared with September 2019.
  • Imports from China slid by 11.9% while falling by 12.6% from Asia.
  • From the U.S, imports fell by 9.9%, with imports from Western Europe sliding by 14.4%.

The Japanese Yen moved from ¥105.426 to ¥105.443 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.01% ¥105.41 against the U.S Dollar.

Out of China

3^rd quarter GDP, fixed asset investment, industrial production, retail sales, and unemployment figures were in focus this morning.

In the 3^rd quarter, China’s economy grew by 2.7%, quarter-on-quarter, following 11.5% growth in the 2^nd quarter. Year-on-year, the economy expanded by 4.9%, following 3.2% growth in the 2^nd quarter. Economists had forecasted growth of 3.2% and 5.2% respectively.

Industrial production increased by 6.9%, year-on-year, in September, following a 5.6% rise in August. Economists had forecast a 5.8% increase.

Retail sales increased by 3.3%, following a 0.5% increase in August. Economists had forecast a 1.8% rise.

The unemployment rate declined from 5.6% to 5.4% in September, which was better than a forecasted decline to 5.5%.

The Aussie Dollar moved from $0.71031 to $0.70961 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.27% to $0.7100.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.30% to $0.6622.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

A lack of stats leaves the EUR in the hands of COVID-19 and any further chatter on Brexit.

With lockdown measures being introduced in Europe, any further steps to contain the virus will test EUR support.

At the time of writing, the EUR was down by 0.05% to $1.1712.

For the Pound

It’s also a quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

A lack of stats will leave the markets to react to any Brexit chatter and COVID-19 news.

Further COVID-19 restrictions are expected on Monday, which would be Pound negative.

At the time of writing, the Pound was up by 0.10% to $1.2928.

Across the Pond

It’s a quiet day ahead for the U.S Dollar.

With no material stats due out of the U.S, the focus will be on Capitol Hill and the U.S elections.

The markets are looking for a clean sweep, which will bring the Senate elections into focus. As Biden leads Trump in the Presidential Election polls, the Democrats will need to stay ahead in the senate polls to support riskier assets.

On Capitol Hill, any hint of progress towards a COVID-19 stimulus Bill would also support riskier assets on the day.

At the time of writing, the Dollar Spot Index was up by 0.02% to 93.697.

For the Loonie

It’s a relatively quiet day ahead. Key stats due out of Canada include August wholesale sales figures.

We don’t expect too much influence on the Loonie, however. COVID-19 news updates and market sentiment towards the economic outlook and demand for crude will remain the key drivers.

At the time of writing, the Loonie was up by 0.09% to C$1.3177 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.