The Week Ahead 2nd – 6th November 2020

Today’s Market Outlook

Asian shares bounced off one-month lows on Monday helped by Chinese factory activity expanding at its fastest pace in a decade, while oil prices skidded as many Western countries slid back into coronavirus-driven lockdowns.

A major risk event this week is the U.S. presidential elections on Tuesday with Republican President Donald Trump trailing Democratic challenger Joe Biden in national opinion polls.

Polls in the most competitive states that will decide the election have, however, shown a closer race, still favouring Biden.

The mood in Europe was downbeat with many countries in the region battling new COVID-19 infections and slipping back into virus lockdowns.

In early European trades, pan-region Euro Stoxx 50 futures STXEc1 were down 0.1%, German DAX futures FDXc1 were flat and London’s FTSE futures FFIc1 were off 0.4%.

In Asia, on the other hand, all major indexes except New Zealand were up on Monday.

Australian shares (AXJO) rose 0.4%.

Chinese shares were higher with the blue-chip CSI300 rising 0.3% with the country’s vast industrial sector steadily returning to levels seen before the COVID-19 pandemic paralysed huge swathes of the economy.

Japan’s Nikkei (N225) jumped 1.4%.

E-Mini futures for the S&P 500 (ESc1) added 0.2%, with investor focus turning to the U.S. presidential elections on Tuesday.

Fresh coronavirus-induced lockdowns in Europe and parts of the United States have raised concerns over the outlook for fuel consumption, sending Brent crude to a low of $35.74 per barrel, a level not seen since late May. U.S. crude went as low as $33.64.

Global coronavirus cases surpassed 500,000 last week with Europe crossing the bleak milestone of 10 million total infections. The United Kingdom is grappling with more than 20,000 new cases a day while a record surge of U.S. cases is killing up to 1,000 people a day.

In the UK, stock prices in London are seen opening lower, following news that England will enter a full lockdown, amid a raft of manufacturing PMI readings on Monday.

Pubs, bars, restaurants and non-essential retail across England will close from Thursday, UK Prime Minister Boris Johnson announced on Saturday, and people will be told to stay at home unless they have a specific reason to leave, but schools, colleges and nurseries will remain open.

People will be allowed outside to exercise and socialise in public spaces outside with their household or one other person, but not indoors or in private gardens, and will be able to travel to work if they cannot work from home. Furlough payments at 80% will be extended for the duration of the restrictions as high streets once again shut up shop.

The pound was quoted at USD1.2904 early Monday, falling down to 1.2875 at the time of writing; down from USD1.2952 at the London equities close Friday.

Overview for the Week Ahead

The US heads to the polls on Tuesday to elect their President which will be the focus for this week. On Friday, the country will publish the US October Nonfarm Payroll Report. The economy is expected to have added 850K new jobs in the month, while the Unemployment rate is seen decreasing to 7.7% from 7.9%.

Still to come in the economic calendar for Monday, there are manufacturing purchasing managers’ index readings from Germany, the eurozone, the UK and the US.

All these events and more have the potential to influence the markets which means there is plenty of trading opportunities.

Today’s High Impact Events

The times below are GMT+2.

Monday 2^nd November

11.00 – Final Manufacturing PMI (Europe)

Potential instruments to Trade: EUR Crosses. 

11.30 – U.K. Manufacturing PMI

Potential instruments to Trade: GBP Crosses. 

17.00 – U.S. ISM Manufacturing PMI

Potential instruments to Trade: USD Crosses. 

Tuesday 3^rd November

All-Day – Japan Bank Holiday

05.30 – Cash Rate & RBA Rate Statement

Potential instruments to Trade: AUD Crosses. 

All-Day – U.S. Presidential Election

Potential instruments to Trade: USD Crosses & Gold. 

23.45 – Employment Change q/q & Unemployment Rate (New Zealand)

Potential instruments to Trade: NZD Crosses. 

Wednesday 4^th November

10.00 – 11.00 – Services & Final Services PMI for Spain, Italy, France & Germany

Potential instruments to Trade: EUR Crosses. 

11.00 – Final Services PMI (Europe)

Potential instruments to Trade: EUR Crosses. 

11.30 – U.K Final Services PMI

Potential instruments to Trade: GBP Crosses. 

12.00 – PPI (Europe)

Potential instruments to Trade: EUR Crosses. 

15.15 – ADP Non-Farm Employment Change

Potential instruments to Trade: USD Crosses & Gold. 

15.30 – Trade Balance (Canada)

Potential instruments to Trade: CAD Crosses. 

17.00 – ISM Services PMI

Potential instruments to Trade: USD Crosses. 

17.30 – Crude Oil Inventories

Potential instruments to Trade: Energies, USD Crosses & Gold. 

Thursday 5^th November

Tentative – EU Economic Forecasts

Potential instruments to Trade: EUR Crosses. 

14.00 – U.K. BOE Monetary Policy Report, MPC Official Bank Rate Votes, Monetary Policy Summary, Official Bank Rate & MPC Asset Purchase Facility Votes

  Potential instruments to Trade: GBP Crosses. 

15.30 – U.S. Unemployment Claims

Potential instruments to Trade: USD Crosses & Gold. 

16.00 – Gov. Board Member Maechler Speaks

Potential instruments to Trade: CHF Crosses. 

16.30 – German Buba President Weidmann Speaks

Potential instruments to Trade: EUR Crosses. 

21.00 – FOMC Statement & Federal Funds Rate

Potential instruments to Trade: USD Crosses & Gold. 

21.30 – FOMC Press Conference

Potential instruments to Trade: USD Crosses & Gold. 

Friday 6^th November

02.30 – RBA Monetary Policy Statement

Potential instruments to Trade: AUD Crosses. 

04.00 – NZD Inflation Expectations q/q

Potential instruments to Trade: NZD Crosses. 

15.30 – Employment Change & Unemployment Rate (Canada)

Potential instruments to Trade: CAD Crosses. 

15.30 – Average Hourly Earnings m/m/, Non-Farm Employment Change & Unemployment Rate

Potential instruments to Trade: USD Crosses & Gold. 

16.00 – BOC Gov Macklem Speaks

Potential instruments to Trade: CAD Crosses. 

17.00 – Ivey PMI (Canada)

Potential instruments to Trade: CAD Crosses. 

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