US President Donald Trump and First Lady Melania Trump have tested positive on SARS-CoV-2. The presidential couple is feeling well, but the financial markets fear political chaos in the United States a month before the presidential election.
Donald and Melania Trump are currently in quarantine in the White House, still fulfilling their duties and feeling well, according to the first press reports about the course of COVID-19 at the presidential couple. Nevertheless, all pre-election meetings have been cancelled and it is unclear how, if and when the campaign meetings will resume. The next debate was to take place on October 15. As a result, Joe Biden's lead over Trump has increased, and the stock market indices have been squeezed in line with the contract for the VIX fear index increase.
Futures on the main US indices are losing more than 1% as the prices of bonds and gold rise. Crude oil may fall by about 6.5 percent this week.
The still developing epidemic, with a number of victims has already exceeded 1 million, causes further restrictions to be imposed by other countries, which in turn may limit the growth of demand for oil. The implementation of another fiscal aid before the US elections is also becoming uncertain. Although the House of Representatives approved the USD 2.2 trillion package, it will probably be rejected in the Senate. Meanwhile, on the supply side of the oil market, OPEC production has increased. This is related to the resumption of Libyan exports after the eight-month blockade of the oil field by the Libyan national army.
Although today's main information will be about the presidential couple however, from the macroeconomic point of view, the publication of key data from the U.S. labor market at 2:30 p.m. comes to the fore. According to the consensus, nearly 900 thousand jobs were to be created in September. If this is the reading, we will see a third consecutive month of slowdown in job restoration. Since the beginning of the crisis, the US economy has only regained about half of its employment. Meanwhile, the aforementioned aid package from the government is still uncertain, which does not help in restoring jobs.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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