SMM Network News: last night, the international financial market was "tumultuous". European stock markets tumbled collectively, while US stocks fell for the third day in a row, dragged down by the European epidemic and the uncertainty of the stimulus package. There may be three main reasons: first, the deterioration of the epidemic in Europe and the re-closure of cities by many countries; second, Hillary Clinton's "email door" attacked candidate Joe Biden during the 2016 US election, greatly increasing the uncertainties of the US election; and third, Trump made concessions and agreed to increase the size of the economic stimulus package to more than $1.8 trillion.
In the early hours of this morning, Trump and Pelosi agreed to increase the size of the stimulus package to more than $1.8 trillion, believing that there was still a chance to pass the stimulus package before the November 3 election, before the three major US stock indexes narrowed their declines. finally closed down slightly, the Nasdaq led the decline again.
Us crude oil inventories fell by 3.818 million barrels, or 0.8%, to 489.1 million barrels last week, EIA said; it is estimated to be down 2.1 million barrels. Crude oil production fell by 500000 barrels to 10.5 million barrels per day. The representative of OPEC said that in September, the implementation rate of production reduction in OPEC+ member countries was 102%, and if the statistics included Mexico, the implementation rate of production reduction was 103%.
By the close of trading in the early hours of this morning, the S & P 500 index of US stocks was down 0.15%, the European Stoxx50 index was down 2.47%, the dollar index was up 0.51% WTI crude oil was down 1.15%, Lun copper was up 0.96%, gold was up 0.39%, American beans were up 0.45%, American soybean meal was up 2.00%, American soybean oil was down 2.18%, American sugar was down 0.49%, and American cotton was up 0.52%. The BDI index fell 4.64%.
Overseas markets were not calm on Thursday. The second epidemic in Europe intensified, Britain, France and other defense epidemic measures continued to escalate, market sentiment rapidly deteriorated, European stocks across the board "flash collapse." At the same time, the US election situation is also increasingly tense, Democratic presidential candidate Joe Biden's campaign members have been detected novel coronavirus infection, and Biden himself has been caught in the "mail door."
On the day, the pan-European Stoxx 600index closed down 2.10% at 362.83 points; Germany's DAX30 index closed down 2.41% at 12703.75 points; Britain's FTSE 100index closed down 1.73% at 5832.52 points; France's CAC40 index closed down 2.11% at 4837.42 points; and Italy's FTSE MIB index closed down 2.77% at 19065.44 points.
As of the early morning close, the S & P 500 index closed down 5.30 points, or 0.15%, at 3483.34; the Nasdaq index closed down 54.90 points, or 0.47%, at 11713.87; and the Dow Jones index closed down 19.80 points, or 0.07%, at 28494.20.
Trump conceded again: agreeing to increase the stimulus to more than $1.8 trillion
On Thursday, local time, Trump gave in again, agreeing to increase the size of the stimulus package to more than $1.8 trillion, believing there was still a chance to pass the stimulus package before the November 3 election. But against a backdrop of huge divisions within and outside the party, the outlook for the US stimulus package remains bleak.
Recently, Trump has been making concessions, first willing to increase the stimulus throttle to $1.5 trillion, then to $1.8 trillion, and then to another step on Thursday, saying that more than $1.8 trillion would be fine.
In an interview with the media on Thursday, Trump said that while hopes of reaching a deal had waned, there was still a chance to pass the stimulus package before the November 3 election. At the same time, Trump also accused House Speaker Pelosi of blocking a deal: "We didn't stop. She pressed the pause button." She wants to wait until after the election. She thinks it will hurt the Republican Party. "
Pelosi then told Democrats that the two parties would not have to wait until January to finalize a stimulus deal.
In addition, the latest US employment data released on Thursday showed that a large number of workers in the United States continued to lose their jobs last week, with 898000 first-time claims for unemployment benefits, the highest level since Aug. 22. it also shows once again that the job market is still difficult to recover to the level before the COVID-19 pandemic. Although the number of initial claims for unemployment benefits was higher than expected, the number of renewed claims for unemployment benefits continued to decline significantly.
The second epidemic in Europe is fierce, and the blockade measures of various countries are escalating.
In the near future, the second counter-attack of the epidemic in Europe is ferocious. It is reported that recently, nearly 100000 new cases have been confirmed daily in Europe, surpassing the United States, which has an average of more than 51000 new cases per day. This is the first time that the average number of new cases per day in Europe has exceeded that of the United States since the novel coronavirus epidemic broke out in the spring of this year.
The peak number of new diagnoses in a single day in some countries has exceeded the peak of the first wave of the epidemic, and many places have begun to implement extremely stringent control measures. In Germany, the number of confirmed cases in a single day reached 6638, the highest since the outbreak on October 15. "We have entered a stage of exponential growth, and the number of people per day has shown this." German Chancellor Angela Merkel said she would take stricter measures to control the epidemic.
Italy also recorded the highest number of new cases in a single day since the outbreak began on 14 October. This figure exceeds the previous record set at the end of March. The Italian government has once again tightened epidemic prevention measures and extended the state of emergency until January 31, 2021.
French Prime Minister Jean Castel announced on the 15th that France will enter a four-week state of health emergency from midnight on the 16th. A day earlier, French President Jean-Claude Macron announced that a curfew would be imposed in nine regions, including Paris, from October 17 until December 1, affecting an estimated 18 million residents. By the early morning of October 16, more than 30, 000 new cases had been confirmed in France in a single day, with a cumulative total of 800000 confirmed cases.
London will be listed as a "high" area of the COVID-19 epidemic from October 17, which means stricter blockade measures will be imposed, according to British media reports. Portuguese Prime Minister Costa also announced that Portugal will re-enter a "disaster state" due to the deterioration of the novel coronavirus epidemic.
Trump caught Biden "pigtail"?
Only about 20 days before the official vote in the US presidential election, a US newspaper published "good news" on the 14th, saying that it had caught "conclusive evidence" of Democratic presidential candidate Joe Biden's collusion with Ukraine, mainly an e-mail. from a computer hard drive suspected to be his son, Hunter Biden.
Republican President Donald Trump immediately opened fire on Biden. However, there are so many dubious sources of emails and hard drives that Facebook, Twitter and other social media have "blocked" links to reports, leading Trump to complain.
(1) one email
The email, written in May 2015, was sent to Hunt by Vadim Pozalski, an adviser to the board of directors of the Ukrainian gas company Brisma, the New York Post reported. Thank Hunt for inviting him to Washington, D.C., "have the opportunity to meet your father and spend some time together." It's a real honor and joy.
Judging from the text, it is not clear whether Pozarski saw Biden. The Biden campaign stated that it looked at Biden's schedule at the time and did not find the meeting claimed in the email.
Hunter joined Brisma's board of directors in 2014, when Vice President Joe Biden was deeply involved in U. S. policy-making toward Ukraine. Senate Republicans recently released a report saying that Hunter's appointment in Brisma may constitute a conflict of interest, but they did not produce evidence to prove that Hunt's appointment had an impact on US policy toward Ukraine.
Trump and his supporters claim that Biden put pressure on then Ukrainian President PetroPoroshenko to dismiss Ukrainian Attorney General Viktor Shokin and exempt Hunt and Brisma from investigation.
Biden did ask Poroshenko to dismiss Shaojin, but at the time the United States and other Western governments thought Shaojin was powerless to fight corruption, the Associated Press reported.
(2) A hard disk
The Associated Press reported that the New York Post report raised more questions than answers.
The mail was provided by former New York Mayor Rudy Giuliani. He is Trump's personal lawyer, and Biden has been "old enemies" for decades, with a record of falsifying Biden's "black material."
The e-mail came from a laptop hard drive, the report said. The laptop was abandoned in April 2019 at a computer repair shop in Biden's hometown of Wilmington, Delaware. The shopkeeper could not tell whether the customer was Hunter, saying the customer neither paid for the maintenance nor took back the notebook.
The shopkeeper copied the contents of the hard drive and provided it to Giuliani's lawyer and informed the FBI. The latter sent agents to pick up the laptop and hard drive. The Federal Bureau of investigation did not respond to this report on the 14th.
Some experts who study false information believe that there are a number of doubts about the email, including whether the notebook belongs to Hunter and whether the email was stolen or forged by hackers. It is worth noting that Stephen Bannon, the former White House chief strategist, was also involved in the incident, who first told the New York Post that the hard drive existed.
"We should see this as a product of Trump's campaign," said Nina Jankowitsch, a researcher at the Woodrow Wilson Center, an independent think-tank. "
(3) A stream of complaints
Shortly after the New York Post report, the Trump campaign issued a statement saying the emails proved that Biden was "lying to the American people." Biden had previously repeatedly stated that he had never discussed his overseas business with his son.
Trump made a fuss of the report at a meeting in Iowa that night, calling Biden a "corrupt politician and should not be allowed to run for president."
According to the Associated Press, as the official vote is approaching, the Trump camp has stepped up its attack on members of the Biden family to mobilize conservatives'"basic plate."
The authenticity of the New York Post report was questioned, and social media companies such as Twitter and Facebook took steps to restrict or ban users from accessing links to the report, fearing that suspicious information would interfere with the election.
Trump later tweeted that it was "too bad" for Facebook and Twitter to remove "conclusive" reports. Republican senators Josh Holly and Ted Cruz accused Facebook and Twitter of being "selectively blocked", Agence France-Presse reported.
Uncertainty increases, dollar index may rise first and then decline in the fourth quarter
From the perspective of the trend of the dollar, che Meichao, a macroeconomic analyst for German futures, believes that the overall trend of the dollar index in the fourth quarter may show a pattern of rising first and then suppressing it. Due to the slowdown of the US economic recovery, a new round of fiscal rescue policies have not yet been agreed upon, uncertainty in the general election has increased, market risk appetite has been suppressed and continued to be bullish on the dollar, but seasonal indicators show that the dollar index fell back and weakened at the end of the year.
Looking back at the trend of the US dollar in the third quarter, we can see that the process of US economic recovery has slowed significantly, the Fed's table expansion has slowed down and did not release additional easing signals, the continued absence of fiscal stimulus policies, and the risk of a third round of outbreaks in the United States pose a greater threat to the economic recovery, causing market risk appetite to fall back, funds continue to flow back to the dollar, and risk aversion has driven the dollar index low to rebound.
In addition, the uncertainty of this year's US election increased further after Trump infected COVID-19, which could lead to an impact on financial markets, consumer and business confidence. At the same time, the new round of US fiscal rescue policy has not been implemented for a long time, suppressing market risk appetite and improving the dollar index in the short term.
However, in terms of election effects and seasonal indicators, the dollar index tends to strengthen before and after the election, while seasonal indicators show that the dollar index fell and weakened at the end of the year. As a result, she expects the overall trend of the dollar index to rise first and then decline in the fourth quarter.
Market volatility increases, precious metals may continue to oscillate
On October 15, the dollar index continued its intraday rally to 93.91 as the novel coronavirus epidemic in Europe worsened and there was little progress in the US economic stimulus deal, causing unease among market investors. International spot gold is caught in a dilemma, hitting as high as $1909.06 an ounce and as low as $1889.45 an ounce. Meanwhile, gold, which has been under pressure for a long time, ended up slightly higher on Thursday as Trump's comments about the fiscal stimulus package rekindled investors' hopes.
In the view of market participants, the current round of US fiscal stimulus package is the key to boosting the US economy and raising inflation expectations, but the US fiscal stimulus policy is deadlocked before the US presidential election day. On the surface, there are differences between the two parties on the scale, but its essence is the intensification of the political struggle between the two parties before the US presidential election. Although Mr Trump has said he will make concessions, the chances of a deal before polling day remain low, reducing the risk of inflation in the near term and putting a drag on gold prices.
At the same time, although a number of events, including geo-risk and the US election, have brought safe-haven buying to the market, in the current environment, the safe-haven attractiveness of the dollar is significantly higher, which causes the dollar index to continue to rise. this has also depressed the price of gold to some extent. At present, gold bulls seem to have no choice but to be patient, waiting for a new round of fiscal stimulus after the US election dust settles before a substantial counteroffensive is expected.
Guoxin Futures analyst Gu Fengda told Futures Daily that with the advance of the US election, factors such as fiscal stimulus, election situation and overseas epidemic vaccines still face high uncertainties. in the future, we need to continue to pay attention to the impact of three factors on precious metal prices.
First of all, it is necessary to pay attention to the fact that the progress of fiscal stimulus is variable and fluctuates quickly. Bullion was boosted by early market optimism about fiscal stimulus, but this week the fiscal stimulus bill intensified divisions within the Republican Party and between the two parties, once again reaching a stalemate, putting pressure on gold and silver. With the real economy still weak and in need of policy support, a new round of fiscal stimulus will eventually be launched, and it is highly likely that after the election, as long as optimistic progress and eventual landing will boost market confidence and benefit precious metals.
Secondly, pay attention to the uncertainty of the American election game. Since National Day, Biden's lead in the polls has expanded, the election situation has gradually become clear, and optimism has triggered a rise in asset prices, including gold and silver. But before the election is settled, there are many variables, uncertainty remains high, and there is a risk that the announcement of the election results may be delayed by an epidemic or politicians, and the anxious election situation is expected to exacerbate market volatility and trigger a safe-haven dollar rebound. become a resistance to the short-term strength of precious metals prices.
Finally, pay attention to the repair of the real economy. With the recent second rebound in the epidemic in Europe and the United States, the US manufacturing PMI, non-farm payrolls data and CPI data all show signs of slowing the pace of repair. We also need to observe the third-quarter GDP and PCE price index of the United States, which will be released in late October, and the progress of new crown vaccine research and development is worthy of attention. If there is a moderate improvement in the speed of repair of the real economy and good progress is made in vaccines, it will provide support for a rebound in inflation expectations and be good for gold and silver.
Looking to the future, he said that if the US election situation is anxious, the government's fiscal stimulus stalemate continues, and the US real economy recovers under the backlash of the epidemic in Europe and the United States, it will deal a blow to market confidence in inflation, and precious metals will still be under pressure to pull back. However, due to the small room for the recovery of nominal interest rates on US Treasuries, the inflation target has been relaxed, which is good for the rebound in medium-and long-term inflation expectations, and the overall correction in precious metals is limited. Due to the intensification of fluctuations in the general election environment, it is expected that the precious metals will still be dominated by wide oscillations in the short term.
