Dollar slides before Presidential debate

GURU WISDOM

"Success is not final; failure is not fatal: It is the courage to continue that counts." - Winston Churchill
 

MARKETS

Greater scope for a new US stimulus deal and a host of M&A activity helped stock markets rally on Monday. Bank stocks were among the biggest gainers led by HSBC which popped 9% after China’s Ping An Insurance said it will raise its stake in the British and Hong-Kong listed bank. 

The more risk-on mood in markets and talk of dissent at the ECB among policymakers saw the euro gain ground against the dollar. The dollar index had its biggest percentage daily drop in a month. That comes after DXY touched a 2-month high last week.

The dollar weakness was a boost to commodities with gold rising over 1% while silver gained 3%. The economic implications of another US stimulus bill pushed oil higher, adding to a powerful rally last week.
 

Presidential debate

The big event of the day comes well after Wall Street closes on Tuesday. US President Donald Trump will enter the ring with Democratic opponent Joe Biden. Should one of the candidates come out with a clear victory it could cause some movement across markets. The New York Times dropped a big story in the lread up to the event suggesting the US President has not paid income tax for over a decade. TV stations run polling immidiatey after the debate but it could be the ensuing days when the latest national polls come in that markets make a big move.
 

Palantir IPO

PayPal-founder and early Facebook investor Peter Tiel’s company Palantir goes public on Tuesday. It is a so-called direct listing rather than an IPO – or initial public offering. It means the company will float the shares directly from existing holders rather than through an investment bank selling shares to favoured institutional investors. Palantir is a data analytics company that counts the CIA as an early investor and readily admits its technology is used by the US army against its enemies.  
 

ECB dissent

Some ECB policymakers are apparently on the verge of making their dissent with the prevailing ECB policy public. Presumably the more hawkish end of the bank’s executive board – were upset with a comment from ECB board member Fabio Panetta who said the central bank should lean towards doing too much rather than too little – implying additional stimulus is needed.