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With less than a month to go until the US presidential election, investors are increasingly focused on how the outcome will impact financial markets. There is no automatic rule for how the dollar and equity markets will react to a Trump or Biden win – it depends on whether the victor will also have full control of Congress or not.
In this article, we will examine five scenarios on the market impacts if there is a democratic sweep, a republican sweep, a divided government, or an inconclusive outcome.
Data releases in the coming week will be scrutinized eagerly for clues on the length and depth of recessions caused by the Covid-19 pandemic, most notably the flash PMI updates for the US, Europe and Japan due on Tuesday.
The market volatility was driven by panic in the markets after the US Federal Reserve announced its somber forecast of the US’s economic recovery post the Covid-19 pandemic. The Fed indicated that the US economy may contract by 6.5% this year and the economic recovery from the Covid-19 pandemic-induced recession would be a slow one, with interest rates remaining very low until 2022, while maintaining its pro-economic policies.
The Federal Reserve kept interest rates close to zero on Wednesday evening, and indicated that they will remain as they are until the American economy recovers from the coronavirus pandemic. Fed Chair Jerome Powell said that there is no plan to raise interest rates, with supporting the economy the priority – and that recovery will take some time.
The Federal Reserve is meeting for the second day in a row and its decision on interest rates is scheduled to be announced this evening at 18:00 BST. This is a vital macroeconomic indicator of expectations for the US economy.
Recent weak US economic data have been mostly ignored by the market, under the logic that the powerful stimulus plans from governments and central banks will set the stage for a quick recovery and the carnage has been signaled well in advance.
Politicians and commentators have mixed feelings over whether Britain should, in the wake of the pandemic, stay allied to EU rules for a longer period.
Markets and economies around the world continue to suffer from the spread of the coronavirus with statistics showing the extent of the negative impact in what is possibly
The US employment report for April will hit the markets at 12:30 GMT today and will reveal just how much economic damage the pandemic has inflicted on the American economy. This data is significant and is one of the key fundamentals for the Fed to determine the new course of monetary policy.
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