Here is what you need to know on Thursday, October 1:
US politicians are reportedly making progress toward a fiscal stimulus deal, prompting a risk-on sentiment that boosts the stocks and weighs on the dollar. Markets await hints toward Friday's Non-Farm Payrolls and are worried about layoffs.
US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have both reported progress in agreeing on a new fiscal stimulus bill after several measures expired in late July and seem to be weighing on the economy. Layoff announcements by Disney and airlines may have been pushing lawmakers to action.
EUR/USD is trading closer to 1.1750, GBP/USD settles above 1.29, and commodity currencies are on the rise as well. Gold is nearing $1,900 and WTI Oil recaptured the $40 level.
Senate Majority leader Mitch McConnell and White House Chief of Staff Mark Meadows has cast doubts on agreeing on a $2 trillion+ package that Democrats want. Headlines are set to rock markets on Thursday as well. Both sides agreed on a stopgap measure to maintain government funding and also reportedly on sending Americans another check.
The US Presidential Debates Committee announced changes in the next two televised encounter. President Donald Trump and rival Joe Biden clashed in a chaotic clash. Snap polls conducted after the event showed Trump performed poorly, raising the chances of a Biden win. However, markets remain worried about a contested election.
More: Presidential Debate: Stocks set to suffer on Trump's refusal to accept the results
The first day of the month features a long list of manufacturing purchasing manufacturing indexes. The ISM Manufacturing PMI is set to hold onto the high ground but may see a drop in the employment component. It serves as another hint toward Friday's Non-Farm Payrolls. ADP's labor report showed an increase of 749,000 private-sector positions, better than expected.
See ISM Manufacturing PMI Preview: Low bar for upside surprise could turn dollar-positive
The US also publishes Personal Spending, Personal Income, and weekly jobless claims, which are projected to resume their downtrend after bumping higher last week. While the data is unrelated to the NFP, it may have an impact on markets and elected officials.
See US Personal Income, Expenditures and Initial Jobless Claims Preview: Old information, new stimulus?
Eurozone and UK final manufacturing PMIs are set to confirm the ongoing recovery in the industrial sector, yet the resurgence of COVID-19 cases could weigh down on these forward-looking indicators.
Coronavirus vaccine disappointments: Moderna, one of the firms conducting a Phase 3 trial, said it would be unable to report progress until November 25, diminishing hopes for early immunization. The US Food and Drugs Administration (FDA) is widening its inquiry into AstraZeneca's COVID-19 vaccine's safety procedures, potentially also delaying progress.
Trading in Tokyo was halted due to "network issues" raising suspicions of a hack.
Cryptocurrencies have been extending their gains, with Bitcoin hovering around $10,800.
See 2020 Elections: How stocks, gold, dollar could move in four scenarios, nightmare one included
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Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
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Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.