Stock market indices have been approaching historical maximums reached in early September. Demand for risky assets was boosted by the resumption of negotiations on a new economic stimulus package in the US after Donald Trump announced withdrawal from negotiations with the Democrats. On Friday, Trump approved a revised stimulus package, which was increased to $ 1.8 trillion. dollars. White House officials have called on Congress to pass separate bailout laws while negotiations on the package continue. In particular, it was proposed to allocate unspent funds from the previous stimulus package for loans to small businesses. Corporate earnings season starts in the US this week.
The dollar remains under pressure due to weaker demand for safe-haven assets caused by hopes for a new US economic support package.
The pound has regained some of the lost positions amid reports of progress in negotiations on a trade agreement between the UK and the EU. The EU Brexit summit will take place on October 15-16. The EU and the UK continue to negotiate, however, October 15 is the deadline set by the UK government for reaching an agreement.
The price of oil declined due to the resumption of production in the Gulf of Mexico, the end of the strike of workers of Norwegian oil companies, as well as the resumption of supplies from Libya.
The price of gold has been approaching the monthly maximum due to the weakening dollar, caused by decreased demand for safe-haven assets.
Main events of the current week
- On Tuesday, data on German economic sentiment index, claimant count change, and average earnings in the UK, as well as consumer price index in the US will be presented. The following companies will report earnings before the market opens: JPMorgan, Citigroup, and Johnson & Johnson.
- On Wednesday, the US producer price index will be released. ECB President Christine Lagarde will speak. Wells Fargo, Bank of America, and Goldman Sachs will present quarterly reports before the market open.
- On Thursday, data on the unemployment rate in Australia, US jobless claims, and the Philadelphia Fed manufacturing index, consumer price index in New Zealand, and crude oil inventories will be presented. Fed representative Neel Kashkari will speak. Intuitive Surgical will report earnings after the market close.
- On Friday, data on consumer price index in the eurozone and retail sales in the United States will be presented.
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