The “48 hours” deadline for the talks between the Democrat leadership and the White House over fiscal stimulus comes to pass today. Democrat House Speaker Nancy Pelosi said over the weekend that Tuesday was the final point at which the stimulus could be delivered before the Presidential Election, two weeks from today. Whilst there have been fluctuations on Wall Street indices, it is interesting that currency and commodities markets have all but lost direction now. According to Pelosi’s camp, they have “continued to narrow their differences” but we have been thrown back on forth on several occasions over recent weeks on this stimulus package. With the potential to use the failure to deliver on stimulus as a political football in the last run up to the election day, we do not hold out much hope that anything positive will be agreed. If this is the case, then a jolt to sentiment could be seen in the coming days, before markets settle in for the prospects of a Biden victory to the White House. Biden holds a 10% lead in the averaged polls, whilst also leading in many of the “swing” states. As for today’s session, there is a mix of sentiment on markets, with little real direction on USD (downside on AUD came after dovish RBA comments with NZD falling in sympathy).
Wall Street ended yesterday with selling pressure into the close. The S&P 500 fell by -1.6% at 3426, whilst futures have clawed back some of this (E-mini S&Ps +0.4%). Asian markets were mixed overnight, with Nikkei -0.4% and Shanghai Composite +0.2%). European indices are accounting for the late slide into the close on Wall Street, with FTSE Futures -0.3% and DAX futures -0.6%. In forex, the only real movers are AUD and NZD weakness. In commodities, with little real move on the dollar, there is a consolidation on gold (-0.1%) and silver (flat). Oil is drifting back but once more lacks real direction.
It is a fairly light economic calendar once more today. The EU Current Account is at 0900BST and is expected to see the surplus increase to +€17.2bn in August (from +€16.6bn in July). Into the US session, Building Permits are at 1330BST and are expected to increase by +3.0% to 1.52m in September (after a slight drop to 1.476m in August). Housing Starts are also expected to improve by +2.9% to 1.46m (from 1.42m in August).
There are another could of Fed speakers again today. The FOMC’s John Williams (voter, centrist) speaks at