RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. See our full Risk Disclosure and Terms of Business for further details.

Search LOGIN

Trump hospitalised by COVID-19!

AUD/JPY – Daily Candlesticks
Source: GKFX / MT4 (October 4th, 2020)

A breakout in the AUD/JPY pair above 0.77 has failed with a move back below the level and down as far as 0.74. The zone between 0.76 and 0.77 was support so should now act as resistance.
 

TAKEAWAYS


•    US President Trump hospitalised with coronavirus, maybe released Monday
•    US dollar bid in muted haven flows, stocks drop
•    Less than one month until US Presidential election
•    DAY AHEAD: China National Day, Final Services PMIs, Eurozone retail sales
 

GURU WISDOM


“Investors should remember that excitement and expenses are their enemies.  And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.” -Warren Buffett
 

MARKETS


The US dollar and Japanese yen- the preferred havens in FX markets gained on Friday amid the uncertainty over the health of the President of the United States. US President Donald Trump tweeted early Friday that he and First Lady Melania Trump had been infected with COVID-19.

Gains in the dollar were limited by a disappointing US non-farm payrolls report that showed a marked slowdown in the labour market recovery. Non-farm payrolls increased by 661,000 last month, less than the 850,000 forecast and well down from the 1.48 billion in August. The dollar finished the week lower despite the gains on Friday.

Stock markets turned lower in the risk-off mood brought about by the hospitalisation of the US President. Talk of an airlines-specific bailout package helped limit the damage although the Nasdaq index still dropped over 2%. European markets recovered opening losses on news of the President’s illness to end flat following a mixed Friday across Asia.

Gold had its best week in nearly two months despite a wobble on Friday. That comes off the back of its worst month since March. The price of oil was red for a fourth consecutive week as oversupply fears from OPEC’s poor compliance to output cuts added to the demand shock from the pandemic. 
 

Trump has COVID


Given the potentially huge repercussions for the US election and for financial markets, it was a relatively modest risk-off day on Friday. Investors found some relief when White House doctors said that the President has mild symptoms. However, Trump later being hospitalised raises doubts about his true condition. He has been put on a course of Remdesivir and the latest reports suggest he is being given a steroid treatment too. 

His age and weight put him in a high-risk category for the coroanvirus but Trump has access to the best possible medical care. So far the President is officially carrying out his duties, however were Trump to become incapacitated; Vice President Pence would step in. Were Pence to become incapacitated, then House Speaker Nancy Pelosi- a Democrat- would have interim power as President until the election.