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US stocks continue to grow, dollar lows for the first time in 3 weeks

The dollar has hit a low level for the first time in three weeks against the backdrop of optimism that an agreement will be reached on economic measures for the additional new coronavirus in the United States.

Democratic Speaker of the House Pelosi and Treasury Secretary Steven Mnuchin will continue discussions on additional measures. Mr Pelosi said he hopes the Democratic Party and the administration will soon reach an agreement, and President Trump said he hopes the package will be larger than the Democratic and Republican parties’ proposals. ..

“At least there seems to be a growing sense of urgency over additional measures within the White House,” said Bipan Lai, head of North American foreign exchange strategy at CIBC Capital Markets (Toronto). “The question is whether the Senate Republicans will go along with it. It doesn’t look like they’re united,” he said. “We expect a stalemate until it becomes clearer whether additional measures will be taken.” ..

The dollar index = USD against the six major currencies fell 0.54% to 93.05, the lowest since September 21st. The 50-day moving average also fell below for the first time since the same day.

The euro is up against the dollar by EUR = 0.57% to $ 1.1825. Dollar against yen JPY = 105.60 yen, down 0.39% .

There is growing speculation in the market that not only will Democratic candidate Joe Biden be elected in the presidential election on November 3, but the Democratic Party is likely to win a majority in the Senate. If the Democratic Party regains power, it is more likely that large-scale economic measures will be formulated, which is a factor pushing down the dollar.

The observation of Mr. Biden’s victory is also a factor pushing up the currencies sold in the US-China trade war that began under the Trump administration. The Chinese yuan has benefited the most, with offshore trading CNH = $ 1 = 6.6778 yuan, the highest level since April 2019.

The pound sterling GBP = was up 0.79% to $ 1.3035. Although the UK’s Gross Domestic Product (GDP) in August was lower than expected, the market is optimistic that a deal will be reached in trade negotiations with the European Union (EU). ..

<Bonds> Government bond yields have risen modestly. US President Trump said on the 9th that he hopes that the support package will be larger than the proposals of both the Democratic and Republican parties over the additional measures against the new coronavirus economy, and risk appetite has improved.

The Wall Street Journal (WSJ) reported that the White House is formulating $ 1.8 trillion in economic stimulus, up from the traditional $ 1.6 trillion. The Democratic Party is calling for $ 2.2 trillion in measures.

Mr. Trump announced on the 6th that talks with the Democratic Party will be suspended until after the presidential election in November. After that, he expressed his intention to turn around and resume discussions.

Following the presidential debate last week, markets are increasingly believing that Democratic candidate Joe Biden will win. The risk market has traditionally not risen with the victory of left-wing candidates, but Biden’s victory is expected to provide further fiscal stimulus and post-election stabilization.

Yields rose modestly that day, but analysts said the rise would be limited for the foreseeable future. BMO Capital Markets analysts Ian Ringen and Jon Hill said the potential for a big rise is limited due to the upcoming elections. It highlights that there is a further rise if there is a decisive victory in either direction. “

Hill also pointed out that the rise in 10-year bond yield US10YT = RR is currently limited by technical factors. The yield was above the most recent peak on August 28 on a day-to-day basis this week, recovering to its highest level since June 10, but closing below August.

In late trading, 10-year bond yields rose 1 basis point (bp) to 0.777%. 2-year bond yield US2YT = RR rose 0.8bp to 0.155%. The yield gap between 2-year and 10-year bonds US2US10 = TWEB narrowed by 1.3bp to 61.9bp.

<Stocks> Continued growth. Expectations for additional new coronavirus economic measures helped. The Nasdaq Composite .IXIC and S & P Composite 500 .SPX have seen weekly growth rates since July, and the Dow Jones Industrial Average .DJI has also recorded the largest increase since August.

US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said today that talks over additional corona economic measures had ended. However, talks are expected to continue.

“The market is pleased that President Trump has reversed his stance on corona measures and has proposed a larger support package than before,” said Tim Grisky, chief investment strategist at Inverness Counsel.

It was also pointed out that the market has begun to digest the possibility that former Vice President Joe Biden of the opposition Democratic Party will win the US presidential election on November 3.

S & P information technology .SPLRCT is 1.5 percent, contributing to push up the S & P total. Meanwhile, Energy.SPNY fell 1.6%.

In the week, NASDAQ increased by 4.6%, S & P increased by 3.8%, and Dow increased by 3.3%.

The Russell 2000 Index, which consists of small-cap stocks, also rose 6.4% weekly, the largest increase since early June.

Among individual brands, semiconductor Xilinx XLNX.O is 14.1% higher. According to The Wall Street Journal (WSJ), competitor Advanced Micro Devices (AMD) AMD.O is in talks to acquire Xilinx. The deal could amount to just over $ 30 billion.

General Electric (GE) is also up 2.9%. Goldman Sachs is pleased with the news that GE coverage has resumed with an investment decision “buy”. Goldman said GE is expected to make a strong recovery from the corona wreck.

On the New York Stock Exchange, the number of rising stocks exceeded the number of falling stocks by a ratio of 1.30: 1. Even in NASDAQ, the number of stocks that increased by 1.42 to 1 was large.

The combined trading volume of the US exchange is 8.92 billion shares. The average of the last 20 business days is 9.76 billion shares.

<Gold futures> It was bought against the backdrop of the weak dollar against the euro and continued to grow. The liquidation price (equivalent to the closing price) for December, the central contract month, was $ 1926.20, an increase of $ 31.10 (1.64%) from the previous day. In the foreign exchange market, the dollar is depreciating against the euro. Gold nuggets and other commodities traded in dollars became cheaper, and gold was bought. There was also a view that the dollar was sold and gold, which is an asset that does not generate interest rates, was bought because of the speculation that if the Democratic Party candidate Biden wins the US presidential election, a large-scale fiscal stimulus will be launched.

Gold prices are also technically strong, with the possibility of hitting a record high in August soon, according to market sources.

The gold nugget spot price was $ 1922.245, up $ 31.550 as of 1:35 pm.

<Rice Crude Oil Futures> The price fell back after receiving reports of a strike in an oil and gas field off the coast of Norway. The liquidation price (corresponding to the closing price) of the central contract month of the US standard oil type WTI for November is $ 40.60 per barrel, which is $ 0.59 (1.43%) lower than the previous day. The December price fell $ 0.56 to $ 40.91.

Labor-management negotiations with Norwegian oil companies were concluded on the 9th, according to Reuters. If the strike continues, the country’s oil and gas production suspension is expected to increase to 966,000 barrels a day by the 14th, which was a supporting factor for the market until the morning. The market was also weighed on by the Organization of Petroleum Exporting Countries (OPEC), which announced that global oil demand would peak in the late 2030s and could begin to decline thereafter.

Meanwhile, in the Gulf of Mexico region, oil companies have evacuated workers from 279 offshore facilities following the hurricane “Delta.” Production of 1.69 million barrels per day, which is 92% of the total offshore production, has stopped, and the market has risen to the positive territory in combination with expectations for the US new coronavirus economic measures.

Dollar / Yen NY Closing Price 105.59 / 105.62 JPY21H =

Opening price 105.84 JPY =

High price 105.94

Low price 105.59

Euro / Dollar NY Closing Price 1.1824 / 1.1828 EUR21H =

Opening price 1.1801 EUR =

High price 1.1831

Low price 1.1794

Eastern time

30-year bond (index issue) 17:05 95 * 06.50 1.5771% US30YT = RR

Previous business day closing price 95 * 14.50 1.5660%

10-year bond (index issue) 17:05 98 * 17.50 0.7787% US10YT = RR

Previous business day closing price 98 * 21.00 0.7670%

5-year bond (index issue) 17:05 99 * 17.75 0.3405% US5YT = RR

Previous business day closing price 99 * 20.00 0.3260%

2-year bond (index issue) 16:29 99 * 30.00 0.1569% US2YT = RR

Previous business day closing price 99 * 30.63 0.1470%

Closing price% compared to the previous day

Dow Jones Industrial Average 28586.90 +161.39 +0.57 .DJI

Previous business day closing price 28425.51

Nasdaq Composite 11579.94 +158.96 +1.39 .IXIC

Previous business day closing price 11420.98

S & P 500 types 3477.14 +30.31 +0.88 .SPX

Previous business day closing price 3446.83

COMEX Fri December Contract 1926.2 +31.1 GCv1 <0 # GC:>

Previous business day closing price 1895.1

COMEX Silver December 2510.8 +123.2 SIv1 <0 # SI:>

Previous business day closing price 2387.6

North Sea Brent December contract 42.85 -0.49 LCOc1 <0 # LCO:>

Previous business day closing price 43.34

US WTI Futures November Contract 40.60 -0.59 CLc1 <0 # CL:>

Previous business day closing price 41.19

CRB Commodity Index 151.7392 +0.5224 .TRCCRB

Previous business day closing price 151.2168

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