Tuesday October 20th, 2020

Equity and currency markets firm while oil prices hold stable ahead of today’s US Stimulus deadline. The House speaker and The Treasury Secretary says they have narrowed the gap, but clarity is required by the end of today. CNY extends its gains testing fresh 27-month highs up 0.1%, alongside Asian currencies also up 0.1% on average. Trading currencies saw JPY& MXN down 0.15%, while AUD up 0.35%, NZD and NOK both up 0.5%. Intraday markets are singularly focused on US Stimulus updates, any related news will dictate direction.

Oil prices hold steady as demand concerns are offset by OPEC’s potential to cancel further easing of output cuts. Monday saw business sentiment improve, but sentiment remains weak and the pace of recovery is expected to continue at a slow pace. C$ is holding within a relatively tight trading range, benefiting slightly from the weaker US$. Support 1.3140, with resistance at 1.3220, if breached look for possible extension to 1.3340 (oct 7th). 

Euro edges higher supported by US Stimulus hopes, testing fresh one-week highs. Euro strengthens as US$ sellers re-emerge on hopes of an 11th hour US Stimulus deal. Domestically German PPI and EUR Current account SA both came out better than expected. Intraday focus is squarely on the US Stimulus talks and the result will dictate Euro’s short-term direction. Support at 1.1670, with resistance at 1.1850.

GBP holds around the mid 1.29’s on a weaker US$ and Brexit updates. Brexit confusion continues after the UK Brexit minister comments saying that the door is “still ajar”. GBP remains supported with the possibility that Brexit deal could still emerge ahead of Dec 31st. Domestically, coronavirus lockdowns restrictions extend in Wales, Liverpool, Manchester, Lancashire and York. Brexit – US Stimulus updates will be the primary drivers for GBP today. Support 1.2830 with resistance holding at 1.3050.