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Macro Roundup (Nov 9)
Nov 9,2020 08:32CST
Data Analysis
The dollar sank to its lowest level in over two months against a basket of peer currencies on Friday, as vote counting for the contentious U.S. election dragged on and investors predicted more losses for the currency.

SHANGHAI, Nov 9 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar sank to its lowest level in over two months against a basket of peer currencies on Friday, as vote counting for the contentious U.S. election dragged on and investors predicted more losses for the currency.

Investors are betting that Democrat Joe Biden will become the next president but Republicans will retain control of the Senate, which will make it difficult for the Democrats to pass the larger fiscal spending package they have been pushing.

Biden maintains an edge over President Donald Trump, but a few important states are still counting votes and Trump is mounting legal challenges to vote counts, so there is still a high degree of uncertainty.

On Wall Street, stocks were set to continue their big post-election rally as futures rose in overnight trading on Sunday. The gains came as Democrat Joe Biden defeated incumbent Donald Trump in the U.S. presidential race to become president elect, according to NBC projections.

Futures on the Dow Jones Industrial Average rose 319 points, implying an opening gain of about 300 points on Monday. S&P 500 futures climbed 1.1% and Nasdaq 100 futures rose 1.4%.

The former vice president won after his projected victory in Pennsylvania as well as Nevada, according to NBC News projections on Saturday. The call came four days after Election Day and amid close counts in several battleground states.

Wall Street hoped the call would reduce the odds of a drawn-out election fight, even as Trump refused to concede. Many traders had put on bets for market volatility in November and were unwinding those positions, helping fuel a rally.

In the meantime, the chances of a “blue wave” that sweeps Democrats into the majority of both the Senate and the House have waned, meaning drastic policy changes such as tax hikes are less likely.

Oil fell below $40 a barrel on Friday as drawn-out vote counting in the U.S. presidential election kept markets on edge and new lockdowns in Europe to halt surging COVID-19 infections sparked concern over the demand.

In the U.S. election, Democratic presidential candidate Joe Biden took the lead over President Donald Trump in Georgia and Pennsylvania on Friday, edging closer to winning the White House as a handful of states continue to count votes.

Three days after polls closed, Biden has a 253 to 214 lead in the state-by-state Electoral College vote that determines the winner, according to Edison Research. Winning Pennsylvania’s 20 electoral votes would put the former vice president over the 270 he needs to secure the presidency.

Gold rose on Friday, set to post its best week since July, as the dollar weakened and increasing chances of a Joe Biden victory in the U.S. presidential election boosted hopes for a larger coronavirus relief bill.

Spot gold rose 0.1% to $1,950.12 per ounce, on track for a 3.6% weekly gain, the most since late July. U.S. gold futures rose 0.5% to $1,955.60.

“A devaluation of the U.S. dollar has driven gold prices to six-week highs, also some safe-haven demand amid the uncertainty of the presidential elections and rising COVID cases,” Kitco Metals senior analyst Jim Wyckoff said.

“The market is factoring in a Biden victory, (which) will lead to more government stimulus programmes and that could introduce some problematic price inflation down the road and also deflate the value of (the) dollar.”

The U.S. unemployment rate fell to 6.9% in October from 7.9%, according to data released by the Labor Department, better than the 7.7% expected by economists. The U.S. economy also added 638,000 jobs last month, topping an estimate of 530,000.

Key economic data slated for release today include Germany Seasonally-adjusted Balance of Trade at the end of September, China Social Financing for October, China M2 Money Supply Growth for October, Euro zone Sentix Investor Confidence Index for November.


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