Risk Off As Trump Tests Positive For COVID
Fiona Cincotta October 2, 2020 7:37 AM
News that President Trump has tested positive for COVID-19 has put the safe haven trade into overdrive.
European bourses are pointing to a deep sell off on the open. News that President Trump has tested positive for COVID-19 has put the safe haven trade into overdrive. Investors are dumping riskier assets and currencies such as stocks, EUR and AUD in favour of safe haven assets such as the, the Japanese Yen, US Dollar and Gold.
Sticking with the theme of uncertainty, Brexit talks are according to Michael Gove are making little progress. With significant divisions still between the two sides as the 9th round of talks come to an end, the chances of entering into an in tense round of talks next week to finish this off seems highly unlikely, which is reflected in the weaker Pound. The FTSE 250 which is more domestically focus could remain under pressure until there is more clarity over the likelihood of a post Brexit trade deal, particularly as
NFP in focus
Attention will now turn to the US non-farm payroll report. Without additional stimulus the recovery in the US labour market has continued but at a slowing pace. Expectations are for 850k new jobs to have been added in September. This is weaker than August’s 1.37 million. The closely watch US jobs report also has a political component this month, as the last NFP report before the elections. Whilst Trump has be supported by solid macros data for the first three years as President, that change significantly with the pandemic.
Given the better than expected ADP report, there is a good chance that the NFP will beat expectations, which could be beneficial for risk sentiment.