At the beginning of another week, the European stock market increased on Monday 12.10.2020. The market will be monitoring U.S negotiations over the latest coronavirus relief bill, which has been under discussion already for several weeks.
The Trump administration proposes a smaller package of $1.8 trillion stimulus package but oppositions, and Nancy Peolcy, believe it is not enough offering $2.2 trillion. Although Trump’s offer is close to the bill proposed by Nancy Pelosi but is not sufficient for the Democrats; this is bothering Republicans as they are fundamentally against the federal debt pile. Investors are generally favoring the Democratic presidential candidate, Joe Biden who is ahead in many presidential election polls because the White House controlled by Democrats will pave the way for a large stimulus package.
Corona Virus continues to dominate the news making the market participants worried as well. Once again, Italy and Germany are imposing new restrictions nationwide to hopefully stop the spread of new cases. Also on Monday, the British prime minister, Boris Johnson, is planning to announce new measures to combat the seemingly unstoppable crisis caused by the pandemic.
In currency news, the Chinese Yuan hit a 17-month high against the USD on Friday; in 12 years, this was the Yuan’s strongest quarterly performance. China is adopting new approaches to stop the Yuan rally by lightening restrictions on betting against the currency. On Saturday, the people’s bank in China announced that from today, i.e. Monday, banks are not obliged to deposit 20% of their sales from"currency forwards" in the USD.
The oil prices continued its descent again on Monday as the strikes ended in Norway, the third-largest exporter of oil and gas. U.S. producers also resumed their work and started pumping the oil again once the hurricane Delta lost its devastating rage. Libya, a war-torn country which had restarted its oil production in El Sharara, is now producing 300,000 barrels a day. This means oversupply, oil market saturation, and more pressure on oil prices.