Last week we saw the news focus on the rise of COVID cases in the UK and Europe. France and Germany announced on Friday that they will be implementing lockdown measures; which was swiftly followed on Saturday by the UK’s own announcement. Despite the negative news surrounding lockdown, we saw economic data paint a more positive picture as both US and Eurozone GDP growth exceeded the massive contractions in Q2. In addition, the German October IFO survey revealed the first rise in expectations in four months. In the meantime, the ECB hinted strongly at further policy changes in December which are likely to manifest itself in further QE.

The US election continues to dominate headlines with Americans heading to the polls on Tuesday. The final weekend saw both candidates continue and drive their campaigns towards the finish lines. As it currently stands according to Real Clear Politics is showing the aggregation of betting odds with Joe Biden showing a 64.7% probability of winning. Michael McDonald, a University of Florida professor who runs the US Elections Project stated that as of Sunday afternoon 34,004,455 in-person votes and 59,126,562 mailed ballots had been returned to election authorities; accounting for two-thirds of all 2016 turnout.

It is likely that economic data and news may take a back seat this week and the focus will firmly be on lockdown measures and the US Presidential race. However, there is still a loaded calendar with UK and US interest rate decisions and US employment data. Continuing to drive Sterling volatility in the background remains ongoing UK/EU trade talks.

Monday

  • UK PMI Manufacturing
  • US ISM Manufacturing 

Manufacturing data form both sides of the pond are set for release but is likely to largely ignored as the UK focuses on updated lockdown restrictions whilst in the US it is the final day before the Presidential election.

Tuesday

  • US Presidential Election

The US Presidential election will take centre stage today with the question marks over when a winner is announced if a side concedes or will there be any challenges to the results. With a large proportion of voting early and the rhetoric surrounding postal votes, there is a strong possibility of a challenge to the result.

Wednesday

  • US ADP Employment Report

The aftermath of the election is likely to dominate headlines with the potential for ongoing uncertainty. In the meantime, the ADP employment report is expected to give some indication of what the government headline labour figures could like on Friday. However, historically there has been some disparity between the two figure which results in a lack of movement on this release.

Thursday

  • BoE Monetary Policy 
  • US Initial Jobless Claims
  • FOMC Meeting

This could be the first day of the UK’s partial lockdown kicking in so it may be interesting to see how the BoE reacts. The BoE expected to announce more stimulus measures following suit of the European Central Bank which indicated that it will move in December. In the meantime, the FOMC meeting is also set to take place, however, given the election had just taken place it is unlikely to announce any new policy and will articulate the result from the election and what this means.

Friday

  • US Non-Farm Payrolls

The US monthly job numbers will likely be overlooked by the result of the Presidential election. Friday’s labour market report which is always seen as a key bellwether of the economy will be watched closely. Recent reports have suggested that the post-lockdown rebound in the labour market is slowing.

Read our Monthly FX Forecast for a longer-term view of currency movement.

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