Markets are largely focused on news out of the US, including renewed hopes for a fresh US stimulus package and US Democratic presidential candidate Joe Biden’s electoral lead.
Greater clarity on Biden’s lead has helped on both fronts, according to analysts at Deutsche Bank in a note.
“[His lead] increased the likelihood of certainty on 3 November and also increased the chance of a Democratic clean sweep which would make Q1 fiscal stimulus a strong likelihood,” the note said.
European equities were largely helped by this news in early trading and have been swinging from positive to negative territory since then.
European Commission president Ursula Von der Leyen was forced to self-isolate after she attended a meeting with someone who tested positive for COVID-19. While she has tested negative, she will remain in isolation until Tuesday evening.
Markets are also waiting to hear from ECB President Christine Lagarde and Chair of the Federal Reserve Jerome Powell. The latter will later be followed by ECB Chief Economist Philip Lane on Tuesday.
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In the UK, the number of cases rose above 10,000 on Monday, following a further 12,594 being reported. An IT error led to almost 16,000 cases being left out of the figures that were reported the previous week, making the full scale of the virus’ spread worse than had previously been thought.
US president Donald Trump leaving hospital on Monday night was a secondary factor to the market rally in Europe and Asia. The latest polling shows he is ahead by just over 8 points in both fivethirtyeight.com and RealClearPolitics polling averages.
Contributing to the market optimism was also news that US House speaker Nancy Pelosi and US Treasury secretary Steven Mnuchin spoke for an hour on Monday on the “justifications for various numbers” in potential stimulus deals and have agreed to continue talks on Tuesday. This suggests that the two sides are working to bridge the ideological divide between the offers from the White House and the Democrats.
Asian markets were largely in positive territory.
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