Weekly market review September 28 – October 2, 2020

September 28, 2020
Weekly market review September 28 – October 2, 2020

Stock market

US stock market indices continued to decline last week amid worsening epidemiological situation in Europe and the growing political confrontation in the United States. However, the indices regained some of the lost positions on Friday amid the resumption of negotiations on a new economic stimulus package in the United States. Democrats in the US House of Representatives are working on a $ 2.2 trillion stimulus package that could be voted this week.
On Tuesday, September 29, 2020, there will be the first round of debates between incumbent President Donald Trump and Democratic candidate Joseph Biden. This round of debates will cover economic issues, pandemic, and issues related to the Supreme Court.
Fed Chairman Jerome Powell, during his testimony in Congress, again stressed the need for additional fiscal stimulus. Boston Fed President Eric Rosengren and Chicago Fed President Charles Evans offered gloomy views on the economic outlook and said Congress needs to enact more fiscal stimulus.

Currency market

The dollar continued to strengthen last week due to increased demand for safe-haven assets amid risks of the second wave of coronavirus pandemic, political uncertainty, and the declining stock market.
The UK government announced the introduction of new lockdown restrictions, which will stay in force at least until the spring of 2021, putting downward pressure on the pound. Meanwhile, London and Brussels continue to negotiate a trade agreement.
The Reserve Bank of New Zealand did not make changes in its monetary policy but gave a signal for a possible expansion of monetary stimulus, which put downward pressure on the New Zealand dollar.

Main events of the current week

  • The US Consumer Confidence Index will be released on Thursday, October 1, 2020.
  • On Wednesday, September 30, 2020 data on the GDP of the UK, the USA, and Canada will be presented, as well as data on China’s manufacturing PMI, German unemployment change, consumer price index in the Eurozone, ADP nonfarm employment change, and crude oil inventories. ECB President Christine Lagarde will speak as well.
  • On Thursday, October 1, 2020 manufacturing PMI’s of Germany, the UK, and the US will be published, as well as data on the initial jobless claims in the US.
  • On Friday, October 2, 2020 data on nonfarm payrolls and the unemployment rate in the US will be released, as well as retail sales in Australia.

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Categories: Analysis

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