This is what you need to know to trade today Thursday October 29th:
Markets are trying to rally and the dollar is down, partially reversing Wednesday’s trends. The lockdown announcements from Germany and France serve as a backdrop for the ECB’s decision. The US GDP will be known today, ahead of an election in which Biden continues to lead the polls.
Rebound: Asian and European stock markets and S&P futures are rising after a selloff on Wednesday. The recovery does not have a significant driver. On Wednesday, the mood turned sour when Germany and France announced month-long lockdowns to combat the spread of COVID-19.
Economists expect the European Central Bank leave its policy unchanged, but some suspect the Frankfurt-based institution will respond to the new measures as an economic hit is anticipated. The entity is expected to expand its Pandemic Emergency Purchase Program (PEPP).
The ECB could also go for a hint of action in December, when new forecasts are released. Christine Lagarde, president of the European Central Bank, will meet with the press and will also be asked about the bank’s strategic review and the option to cut rates.
Watch:
European Central Bank Preview: Three Charts Show Why Lagarde Could Take EUR / USD Down
ECB Monetary Policy Meeting: Another One Bites the Dust
The first publication of US Gross Domestic Product for the third quarter it could show an annualized growth rate of more than 30%, which would mean a strong recovery after the drop in the second quarter. Personal consumption and public spending are among the most closely watched components.
See US Q3 GDP Preview: Everything Goes Down, Should It Go Up?
The critical figure will be published five days before elections, in which more than 75 million Americans have already voted. Recent opinion polls continue to show President Donald Trump behind his rival Joe Biden. Nate Silver’s FiveThirtyEight points to an 88% chance that the Democrat will enter the White House.
The battle for the Senate is closer. Republicans have about a 25% chance of holding the upper house. Markets expect a total victory for Democrats, also known as a “blue wave,” who would later pass a massive stimulus package.
Brexi: GBP / USD is holding higher than other currency pairs as EU and UK negotiators have made progress in talks. Negotiators are in the process of drafting the state aid treaty, but remain at odds on the politically sensitive issue of fisheries. The talks are now moving to Brussels.
British Prime Minister Boris Johnson continues to contemplate a total lockdown, amid high coronavirus numbers in the UK.
The Bank of Japan kept its policy unchanged, as expected, but downgraded its economic outlook. USD / JPY has recovered from lows, in line with the market recovery.
The Bank of Canada it also stood firm in its October decision and warned that US growth is slowing down considerably. On the other hand, the Ottawa-based institution reduced its bond purchase scheme. USD / CAD is hovering around 1.33, while WTI Oil remains on the defensive just above $ 37.
Cryptocurrencies: Bitcoin has stabilized above $ 13,000 after temporarily dipping below that level on Wednesday.
See Gold Price Analysis: XAU / USD Has Three Paths in Response to 2020 Presidential Election
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Credits: Forex Street
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