Markets Rocked As Trump Ends Stimulus Negotiations
Financial markets took a hit late yesterday evening after President Trump announced that he would request his team end negotiating a new stimulus package with the Democrats. Stock markets immediately plunged lower while safe-haven assets saw a strong bid. The US dollar and global government bonds saw solid inflows as the development flooded across financial news outlets.
The news broke after the President embarked on what turned out to be a tweetstorm. He tweeted about numerous subjects including the 2016 election, Russian interference, the FDA (Food and Drug Administration), and also about the current negotiations over a new stimulus package. His tweet read “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”. This is a surprising turn of events that potentially leaves the US people and business owners with heavily reduced assistance up until December.
This development makes the next 4 weeks even more important for financial markets. Between Brexit negotiations and the US election, the GBP/USD pair will be heavily in the spotlight. Over the last week, it’s seen some very significant moves, both higher and lower. Should you wish to mitigate the risks the pair faces over coming weeks, please consider the use of a forward contract, which can provide an element of certainty for your requirements in these highly uncertain times. Speak to your Cornhill FX representative for more information.
Today’s economic calendar sees another speech from ECB President Christine Lagarde. We will also have the latest set of Fed meeting minutes released at 7pm tonight.
8:46am, October 7th 2020
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