Thread: ForexMart's Forex News

October 07. Futures on US indices are growing in anticipation of the Fed meeting minutes

Futures on major US stock indexes started to rise on Wednesday after a sharp drop a day earlier after President Donald Trump announced that he would stop negotiations on supporting the economy. Further trading dynamics will depend on the publication of the minutes of the last meeting of the US Federal reserve system this evening.

The Dow Jones industrial average rose 0.82% to 27928 points, the NASDAQ high-tech index rose 0.88% to 11373.88 points, and the S&P 500 broad-market index futures rose 0.83% to 3380.88 points.

Investors are awaiting the release of minutes from the Fed's September meeting, in which they think to find details of further prospects for the recovery of the American economy in the context of the coronavirus pandemic.

Yesterday's decline was caused by US President Donald Trump's announcement to end negotiations with Democrats in the house of representatives on stimulating the economy before the November presidential election. The reason was a disagreement over the amount of stimulus: house speaker Nancy Pelosi is demanding $2.4 trillion, and the White house administration is ready to give no more than $1.6 trillion.

October 08. U.S. unemployment shrinks amid slow growth in new jobs

According to the US Department of Labor, last week the number of Americans who filed initial applications for unemployment benefits fell to a minimum since the start of the pandemic – to 840 thousand people. At the same time, the number of applications for benefits remains at a level indicating a slowdown in the recovery of the labor market, as the virus epidemic has dragged on. Economists predicted a stronger decline – to 820 thousand people.

The number of secondary applications fell to 10.576 million, more than 1 million in a week.

The total number of people who have applied for all forms of unemployment benefits fell by just over 1 million to 25.505 million.

The ministry's report emphasizes that there is an urgent need for additional fiscal stimulus to help the economy recover from the recession caused by the epidemic. In September, only 661,000 jobs were created in the United States, the smallest increase since the start of the labor market recovery in May. In August, the increase amounted to 1.489 million.

October 12. Saudi Arabia will host the largest banking deal of the year

National Commercial Bank (NCB), the largest Bank in Saudi Arabia by assets, announced the purchase of rival Samba Financial Group for $15 billion. This deal will be the largest in the banking sector since the beginning of 2020. It is expected to be closed in the first half of 2021.

The combined Bank with assets of more than $220 billion will be the third in this indicator among financial institutions of the Gulf countries, its capitalization will exceed $46 billion.

NCB will pay 28.45 Saudi riyals ($7.58) per Samba share, which values the entire Bank at 55.7 billion riyals. The deal will be paid for with NCB shares. As a result, NCB shareholders will own 67.4% of the combined Bank, while Samba shareholders will own 32.6%. The national welfare Fund of Saudi Arabia Public Investment Fund (PIF), which is the largest shareholder of both banks, will own 37.2% of the combined financial institution.

The Saudi authorities continue to act in accordance with the plan to diversify the country's economy and reduce its dependence on the oil sector.

October 15. Germany introduces additional measures to combat Covid-19

German Chancellor Angela Merkel agreed to introduce additional measures in the country to combat the spread of COVID-19. At the same time, most of the new restrictions do not apply to the entire territory of Germany, but only to those parts where the number of cases of coronavirus will actively grow and reach 35 or 50 people per 100 thousand inhabitants.

If 35 people per 100 thousand get sick, then citizens will have to wear masks in crowded places. In regions with an incidence of 50 people per 100 thousand inhabitants, a ban on the work of bars and restaurants after 23:00 will be introduced. The number of people at private parties will be reduced to 10.

Merkel noted that if these measures do not help to reduce the number of infections, new tough restrictions will be introduced. According to her, Germany has come to a «decisive and critical phase», when the growth of new cases of the disease has already begun.

October 19. US exchanges are growing on expectations of economic stimulus

Major US stock indexes rallied on Monday in anticipation of news on a new US fiscal aid package and the upcoming November 3 presidential election.

Thus, the Dow Jones Industrial Average grew by 0.3%, to 28690.91 points, the NASDAQ high-tech companies index – by 0.72%, to 11755.51 points, the S&P 500 broad market index – by 0.49%, to 3501.02 points.

Markets remain focused on expectations for a new stimulus package for the US economy. The Republican administration of D. Trump supports a package of measures worth $1.8 trillion, but Democrats, led by Joe Biden, insist on $2.2 trillion.

Over the weekend, it became known that the Speaker of the House of Representatives Nancy Pelosi made it clear that the agreement on US fiscal stimulus could be concluded from day to day, until the presidential election.

October 21. EU intends to prepare a response to possible US sanctions

German Foreign Ministry spokesman Christopher Burger said that the European Commission intends to consider ideas on measures to respond to economic sanctions by the United States by the end of the year.

The proposals imply the formation of an EU export bank up to the creation of a digital euro. This will allow the EU to be independent from the US financial system.

Moreover, the «pan-European instrument» should enable the European Union to respond to sanctions with retaliatory sanctions as a last resort. Also among the discussed measures – restrictions on the import of mobile phones from China.

October 23. US exchanges are trading in positive territory on forecasts for state aid

According to the trading data, the main US stock indexes on Friday are mainly growing against the background of how investors assess the prospects for a new package of support for the US economy.

The Dow Jones Industrial Average (DJIA) rose 0.13% to 28399.19 points, the NASDAQ high tech index fell 0.13% to 11,490.58 points, the broad market S&P 500 index rose 0.27%. up to 3462.8 points.

Investors also continue to monitor the situation around the presidential elections in the United States, which will be held on November 3. The final debate between Republican candidate Joe Biden and incumbent President Donald Trump ended yesterday. According to the poll, Biden won the final debate.

Internal statistics had an additional impact on the US stock market. Composite index of business activity (PMI) in October, according to preliminary estimates, rose to 55.5 points from 54.3 points in September. The PMI index in the services sector increased over the reporting month to 56 points against the September estimate of 54.6 points. Analysts expected the indicator to remain at the same level. At the same time, the PMI in the industry rose to 53.3 points from 53.2 points, growth was expected to 53.4 points.

October 27. US consumer confidence index unexpectedly declined in October

According to analyst firm Conference Board, the consumer confidence index in the US in October fell to 100.9 points from the revised index of 101.3 points in September. Analysts had forecast an increase in the index to 102 points from the original September value of 101.8 points.

The release noted that consumer confidence eased slightly in October after a sharp improvement in September. And now, there are few factors that could contribute to the economic recovery in the final months of 2020 (especially with the growth in the number of coronavirus infections in the United States and high unemployment).

The index of economic expectations in the United States in October fell to 98.4 points from the revised September index of 102.9 points. The initial figure for the previous month was 104 points.

The index of economic conditions in the reporting month rose to 104.6 points from the revised September value of 98.9 points. The original figure last month was 98.5 points.

October 28. Bank of Canada has kept the rate at the same level of 0.25%

The Bank of Canada on Wednesday kept its key interest rate at a record low of 0.25%. Earlier, the head of the Canadian Central Bank, Tiff Maclem, said that the rate would remain unchanged for at least two years amid a slow economic recovery after the coronavirus pandemic.

Representatives of the regulator also noted that in the next two years, the country's economy will experience excess supply, which will lead to keeping inflation below the target level (2%) until 2022. Also, the central bank stressed that the recovery process of the Canadian economy will be long and uneven.

The Bank also raised its growth forecast for the third quarter to 47.5% on an annualized basis. He also predicts stronger annual growth in 2020, although he lowered his forecast for 2021.

October 29. ECB expectedly kept the base rate at zero level

The Board of Governors of the European Central Bank (ECB) at its meeting today kept the base interest rate at a record low of 0%, as expected by most experts. The rate has been at this level since March 2016.

The rate on deposits was also kept at the level of -0.5%, while the margin rate remained at the level of 0.25%.

The European regulator said it will keep all rates at or below current levels until inflation in Europe approaches the 2% target.

In addition to the rate, the Central Bank also left unchanged the parameters of the special asset purchase program Pandemic emergency purchase program (PEPP). To date, the volume of the program is 1.35 trillion euros, and it will operate at least until the end of June 2021.