Here is what you need to know on Wednesday, October 28:
The market mood remains damp as Germany, France, and possibly the UK are mulling new restrictions as coronavirus cases spiral. Tension is rising ahead of the elections and their implications for stimulus. The Bank of Canada is set to leave rates unchanged, and Bitcoin is grabbing attention by hitting the highest since January 2018.
COVID-19 cases, deaths, and hospitalizations are surging in Europe. French President Emmanuel Macron will address the nation later in the day and a monthlong strict lockdown is mulled after a nighttime curfew failed to stem the disease. German Chancellor Angela Merkel is also considering harsher restrictions. EUR/USD slipped below 1.18 late on Tuesday.
UK: The Telegraph reports that experts are pushing Prime Minister Boris Johnson to announce another lockdown, yet there are disagreements within the cabinet. Brexit talks are at “a most difficult point” according to EU Council President Charles Michel. GBP/USD has been holding up above 1.30.
US Elections: President Donald Trump continues trailing rival Joe Biden, yet the president seems to gain ground in the critical battleground state of Florida. Over 70 million Americans – more than half of the 2016 total vote count – have already cast their ballots, Markets want a clear outcome, preferably a “blue wave” that would swiftly approve a multi-trillion stimulus bill. Rising uncertainty and tensions are weighing on markets.
AUD/USD has been edging higher after inflation figures for the third quarter marginally beat expectations. Melbourne is gradually emerging from its lockdown.
The Bank of Canada is set to leave its interest rate unchanged at 0.25% and publish new forecasts in its quarterly Monetary Policy Report. Governor Tiff Macklem and his colleagues will likely address the impact of covid concerns on the economy.
Bitcoin is trading near $14,000, the highest since January 2018. The leading cryptocurrency has been on a rising trajectory for several months. Ethereum is lagging behind.
Oil prices are on the back foot, with WTI changing hands below $38.