Tuesday morning seems to bring a strengthening of the U.S. dollar, as a result of which the exchange rate of the main currency pair EUR/USD fell below 1.1800 and the zloty weakened towards 3.80 per dollar. It seems that the euphoria has decreased a bit in the market and investors have taken some of the profits from risky assets after the rally in the US stock market.
On Monday, the Dow Jones Industrial Average index rose by 0.9%, while S&P 500 climbed 1.6%, Nasdaq rose by nearly 300 points or 2.6%. As a result, the US stock indices are already very close to their record levels.
Pause in J&J Covid-19 vaccine study due to ... disease
Today, this optimism seems to be cooling by the news of a pause in Johnson & Johnson's research on the vaccine. The reason: a disease in one of the study participants.
The fate of the aid package for the U.S. economy is still unclear, as Congress and the White House cannot agree on this. Uncertainty is also introduced by the beginning of the results season on Wall Street. BlackRock, Citigroup, Johnson & Johnson, JPMorgan Chase and Delta Airlines are scheduled to publish their reports for Q3 2020 today.
Unemployment in the UK like it has not been for three years
In the foreign exchange market, investors' attention may be drawn to the British pound, which is quoted above 1.30 USD. According to macroeconomic data published today, the unemployment rate in the UK has risen to 4.5 percent from 4.1 percent. This is the highest level of unemployment since 2017.
On the brexit front, leaders on both sides are preparing for Thursday's summit in Brussels. That is when leaders from the European Union and the UK will discuss preparations for a possible collapse of trade talks with the UK, Bloomberg agency said. Until then, Michel Barnier, the EU's chief negotiator, will inform all 27 European affairs ministers about the state of the talks on Tuesday.
We congratulate China on its rebound
On the positive side, it is worth noting the data from China, where exports grew for the fourth month in a row by 9.9 percent in September. This was supported by further improvement in global demand, as more countries have lifted coronavirus-related restrictions.
Over the past few months, Chinese exports have increased thanks to record supplies of medical supplies and high demand for electronic products. In contrast, sales of refined products fell by 30.5 percent year-on-year, and steel products by 28.2 percent. China is now the undisputed winner in the pursuit of economic recovery after the spring shock.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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