Stocks and oil prices rose on Monday. It is because expectations of stimulus and Donald Trump's improved health advice are carrying on. The situation has made the market better after a panic last week by looking for assets that are safe in uncertainty.
President Trump was flown to get the treatment on Friday in a hospital. However, his doctor said he had responded well and could return to the White House as soon as Monday. This news was welcomed by the market with positive feedback.
Optimism over fiscal stimulus in the world's largest economy also played into play after weekend upbeat comments from Trump himself and the U.S. House of Representatives Speaker Nancy Pelosi. They say progress is being made on aid or stimulus legislation lately.
Trump's Infection Affects Market Conditions
Trump's declared positive infection also occurred less than a month before the presidential election on November 3. This has the potential to trigger more market volatility and make voting results increasingly difficult to predict.
It also raises questions in the minds of passers-by, with a survey on Monday. The survey showed the eurozone's recovery stalled in September as a resurgence of the coronavirus forced the re-enactment of activity restrictions. Meanwhile, the USD update is always monitored.
The dollar is trading in a tight range, while the currency is at risk of strengthening. It is because investors are waiting for news on Trump's health and the progress of fiscal talks in Washington. The dollar index fell as much as 0.3% to 93.55.
Investors Now Feel more Comfortable
The yield on 10-year government bonds rose to 0.7154% and the U.S. yield curve rose slightly. This situation means investors are comfortable taking more risks. However, eurozone bond yields held near recent lows. This comes amid concerns about possible new restrictions to fight the coronavirus.
The French government has announced new restrictions and closed the bar for two weeks. Other countries across Europe are also considering more action. It means that economic improvement is still unsure until now. It is also still difficult to face.
XAU gold, which is often purchased in times of uncertainty, initially fell. It happened several days ago in the market. It then turned slightly positive, rising as much as 0.2% to $1,902.3. This comes as a weaker dollar offsets news of Trump's health progress.
The USD is now More Stable
The U.S. dollar looked steady against its peers on Monday as investors’ awaited clarity on the health of U.S. President Donald Trump. With not many major economic indicators released this week, it means that the focus is on Trump's ailments.
There is a lot of information about severe conditions, making it difficult for market participants to move. Earlier, some players bought back U.S. dollar and stock futures as soon as the news came out about Trump leaving the hospital. His condition is better.
The dollar index was at 93.789 points. The USD rose 0.2% to 105.515 yen gainst the safe-haven Japanese yen. The dollar rose after its sharpest drop in more than a month to hit a one-week low of 104.95 on Friday.
Post-Brexit Negotiations Continue
British Prime Minister Boris Johnson and the EU chief executive, Ursula von der Leyen, agreed through to step up negotiations on a post-Brexit deal. Johnson doesn't want the transition period to end without a new trade deal. The British pound was last at $1.2942.
Meanwhile, the euro changed hands at $1.1723. Investors are also awaiting a vice-presidential candidate debate on Wednesday. It may give an impact on the market. Expectations that the U.S. Congress will issue a stimulus package to support the pandemic-ravaged economy remain low.
U.S. House of Representatives Speaker Nancy Pelosi on Sunday said progress was being made on legislation to help the coronavirus. The focus on markets this week shifted to central bank events and whatever clues they offered about the health of the global economy.
