Risk On Relief Rally as Joe Biden Takes the White House
Fiona Cincotta November 9, 2020 7:47 AM
European bourses are opening firmly on the front foot in a risk on relief rally as Joe Biden wins the race to the White House.
European bourses are opening firmly on the front foot in a risk on relief rally as Joe Biden wins the race to the White House. Whilst Trump still refuses to accept the result, this isn’t affecting the joyous mood in the market, at least for now.
European bourses are advancing, US futures are pushing higher and even oil is rebounding after a tough previous week. However, the outlook could darken slightly from here given that Biden could also struggle to push a big covid fiscal stimulus package through congress. Whilst a rescue package is still possible, a larger package is unlikely putting more pressure on the Fed to act. The markets will be following stimulus talks closely across the lame duck period ahead of Joe Biden’s inauguration in January.
With covid cases in the US surging and the total number of cases stateside nearing 10 million, the pressure is on for a deal. Oil for the time being is focusing on the Biden win, with Brent trading over $40 per barrel. However, without a big rescue package and as more of Europe locks down, this level is unlikely to hold for long.
Brexit talks resume
Brexit is very much back in focus as Michel Barnier returns to London to resume Brexit trade talks with his UK counterpart David Frost. Boris Johnson was sounding more upbeat over the chances of a deal after speaking with EC President Ursula von der Leyen saying that a deal was there to be had. However, differences remain over fisheries and a kevel plating field.
Pressure is once again mounting as a mid-month soft deadline comes into focus. There is a good chance that rising covid cases and Joe Biden in the White House, who has previously cast doubt on Boris Johnson’s Brexit moves could focus minds to get a deal done. GBPUSD trades just shy of $1.32 amid risk on USD weakness and cautious pound strength.
BoE’s Andrew Bailey could move GBP when he speaks this morning regarding covid and its impact.
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