In terms of fundamental reports, today there are quite a few. Japan’s inflation rate is stuck at 0.00%, though core inflation was slightly higher than anticipated.
Furthermore, consumer confidence in the United Kingdom was lower than predicted at -31, though the drop is hardly surprising, considering the worsening of the coronavirus pandemic in the island country. UK retail sales, on the other hand, outperformed the forecasts.
The United Kingdom’s PMI indices were more of a mix. The services and the composite PMIs both disappointed, though manufacturing bested investors’ expectations.
The flash PMIs from Germany were also rather optimistic, with manufacturing at 58 and the composite at 54.5, both better than anticipated. The German services PMI is the only one that didn’t meet the forecasts, but that sector is affected by the pandemic the most.
The eurozone-wide PMI flash reports were also better than expected with manufacturing at 54.4 and the composite index at 49.4. Although a number below 50 still shows a contraction, the index is slightly higher than the forecast, indicating that the European economy took a slightly weaker blow in October.
Still, due to the heavy spread of Covid-19 around the world, and especially in Europe these past couple of weeks, the continent’s economic troubles could get worse before they get better.
Later in the day we expect the PMI reports for October from the United States. Yesterday’s jobless claims were all around better than forecasted, so an upbeat set of PMIs could further help improve market sentiment.
Meanwhile, investors now have even more confidence in a Joe Biden win this November thanks to last night’s presidential debate. In the last stand-off between the two candidates, Trump failed to make a strong impression. The polls are largely unchanged. Thus, US stock indices are growing on the hopes that a Biden presidency will come with more stimulus attached.
