US Stocks Rise With Treasuries Amid Aid Talks

Most US stocks rose after the Trump administration resuscitated hopes for a spending package. Treasuries remained higher. The S&P 500 rose by 0.34% to 3,465.39 while Dow Jones was down 28.09 points (0.099%) to 28,335.57.

Pelosi, White House Say Each ‘moving the Goalposts’ on Stimulus

House Speaker Nancy Pelosi said the chamber could pass a pandemic relief plan this week, though a deal with the White House remains elusive and the Republican-led Senate might not act before the Nov. 3 US election. Pelosi cited a continuing lack of agreement on funding for stemming the coronavirus pandemic and on aid related to education.

Europe’s Economy Risks New Contraction From Virus Curbs

The resurgence of the coronavirus has knocked Europe’s economic recovery back a step and raised the possibility of another contraction. IHS Markit’s monthly measure of business activity fell to a four-month low of 49.4 in October from 50.4 in September. Within the report is a clear, divergent trend of manufacturing strength being offset by damage to services from the second wave of the pandemic.

Brexit Talks Extended to Oct. 28 as UK Indicates Optimism

The latest trade talks between Britain and the European Union have been extended into the middle of this week, as the UK government indicated optimism about signing a deal. EU Chief Negotiator Michel Barnier will remain in London for discussions through Oct. 28, according to a British government official, who asked not to be identified. The UK and the EU have moved into an intensive phase of talks in a bid to secure a free-trade agreement, after Britain temporarily walked away from the table.

France Dragged Back Into Economic Slump by Virus Resurgence

The resurgence of the coronavirus has dragged France’s economy back into a slump, cutting short the recovery from the lockdown recession. IHS Markit’s monthly survey of business activity dropped more than economists forecast in October, falling to a fivemonth low of 47.3 from 48.5. A gauge for services dropped even further below the 50- mark that distinguishes expansion from contraction, reflecting the return of restrictions that have crimped demand.

Hong Kong Sept. Exports Recovered on China, Finance Chief Says

Hong Kong’s exports rebounded in September on the back of a recovering Chinese economy, Financial Secretary Paul Chan said. The city’s third-quarter gross domestic product should show a significant improvement from the two preceding three-month periods, Chan said. Hong Kong’s GDP slumped by about 9% in both the first and second quarters as the coronavirus outbreak forced most countries to go into some form of lockdown.

China Reconsiders Its Global Strategy for the Yuan

China is reconsidering its strategy for the internationalization of the yuan and planning for more policy support after completing a comprehensive review recently, according to a senior central bank official. “As everybody knows in the past, the internationalization of the RMB (yuan) sticks to the market principles,” Zhu Jun, director general of the People’s Bank of China’s international division, said.

Oil Extends Decline on Surging Virus Cases, Stimulus Stalemate

Oil extended its slide as an increase in coronavirus cases around the world and dwindling prospects for a pre-election US stimulus deal added to a gloomy demand outlook. Brent crude for December settlement fell by US$0.39 to US$41.38 per barrel

Source: Affin Hwang Research - 26 Oct 2020