Risk-off, stocks down, still no progress on US stimulus

Ross J Burland FXStreet

Risk-off is kicking in as the US session progresses but US stimulus talks do not.

In the latest update, a call between the Dems has given the market renewed negative sentiment:

House Dem caucus call happening now and based on comments from Pelosi and committee chairs , per sources on call, a deal with Mnuchin is not sounding imminent
— Erica Werner (@ericawerner) October 19, 2020

Moments after the updates, risk fell off a cliff with the S&P 500 extending losses to a low of 3433, and to trade down over 1.4%.

USD/JPY was supported by S&P slide in NY, that favours top haven USD.

Session high so far 105.50 vs the Wednesday & Thursday highs that were at 105.51/50.

The dollar is currently a slightly better haven than the yen and Treasury yields are firming on fiscal relief hopes, as well as the strong September Retail Sales.

Add to this news that Mike Pompeo has just tweeted the following:

'We are sanctioning mainland-China and Hong Kong entities and individuals for conduct related to the sanctioned proliferator the Islamic Republic of Iran Shipping Lines. Our warning is clear: If you do business with IRISL or its subsidiaries, you risk US sanctions.''

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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