On Saturday, the media called the US presidential election for Joe Biden, but President Trump rejected the outcome and won’t concede. Biden is expected to keep stocks running, despite early fears that a Democrat’s victory will mean tax hikes. Nevertheless, hopes for massive stimulus have arisen, as Biden has already announced he's working on a COVID-19 task-force that will be announced on Monday. Coronavirus: The world has surpassed 50 million cases on Saturday when the US reported roughly 125K new cases. The number of contagions in Europe was roughly 300K in the same day, with the second wave hitting hard the northern hemisphere. Hopes are that vaccines will start rolling in the first half of 2021.
Meanwhile, Brexit trade talks remain at a stalemate, with just a week remaining before the UK and EU parliaments need to begin ratification of a trade and security deal, could cause severe damage to the pound.
AUD/USD: 0.7239 – 0.7287
EUR/USD: 1.1814 – 1.1891
GBP/USD: 1.3094 – 1.3177
USD/JPY: 103.18 – 103.71 (the lowest since March)
USD/CAD: 1.3020 – 1.3091
NZD/USD: 0.6763 – 0.6802
AUD/JPY: 74.87 – 75.34
AUD/NZD: 1.0696 – 1.0735 (a 20-month high)
Following the Biden victory, markets may look to move back into risk assets this week, although the prospect of recounts in several states and Trump digging his heels in may weigh on risk appetite and risk positions. Key Chinese data will likely contrast the strong recovery in China with Europe’s second COVID wave and a resultant tightening of restrictions across the continent.
Strong risk sentiment remains with the AUD/USD now firmly trading on a 0.7200 handle. Offering interest likely rests above last week’s high of 0.7289 and again at 0.7315 while demand is expected to emerge on any dip back toward 0.7200.
Event Risk Data Today
Euro Area: The resurgence of Covid in the region will stall the recovery in Sentix investor confidence (prior: -8.3).
Germany: The trade surplus declined to €12.8bn in August, as weak global demand weighed on exports.
US: FOMC’s Mester will speak at a Fintech Conference (05:30 AEST).