The anti-risk US Dollar[1] and Japanese Yen[2] weakened this past week as a revival in fiscal stimulus hopes bolstered global market sentiment. The S&P 500[3] gained 3.84% in its best week since late June. The tech-heavy Nasdaq[4] Composite soared 4.56%. Anti-fiat gold prices[5] capitalized on weakness in the Greenback, rallying for a second consecutive week alongside crude oil prices[6].
US policymakers inched closer towards a package. After initially calling off stimulus talks until after the November election, President Donald Trump turned a 180 as he signaled that he wants a larger package than what both parties have offered. The Democratic-proposed bill is about $2.2 trillion with Republicans now looking at a $1.8 trillion outcome.
Heading into the new week, Senate Majority Leader Mitch McConnell said that he doesn’t know if there can be a deal or not. Sentiment will also continue being influenced by polling data. Joe Biden’s widening lead against Trump has raised prospects of a larger-than-expected stimulus package[7]. Meanwhile, the Federal Reserve seems to be sitting on the sidelines for the time being.
Brexit talks are supposedly heading into the final push this week, opening the door to British Pound[8] volatility. UK Prime Minister Boris Johnson picked October 15th as the last do to potentially strike a deal with the EU. The third-quarter earnings season is also kicking off in the US with major financial institutions reporting. Australia releases its next jobs report. What else for markets next?
Fundamental Forecasts:
Gold Price Outlook Dictated by Presidential Polls, Fiscal Aid Hopes[9]
Gold’s resilience in the wake of fading fiscal aid hopes suggests that the price of Bullion may hinge on
