Weekly reviews

Review of the key events of the upcoming week 05.10 - 11.10


Main events of the upcoming week

Reports of of Donald Trump and his wife being infected by COVID-19 significantly increased trading volatility at the end of the previous week. Investors abandoned risky assets amid sharply increased uncertainty in the US election race. Experts cannot yet say for sure how this news will affect the rating of the US presidential candidates.

Other factors increased the market uncertainty. Republicans and Democrats cannot agree on a new bill on additional financing of the economy, while calls from the Federal Reserve for increasing government support for the economy are intensifying. The minutes of the last FOMC meeting will be published next week, which can clarify the position of individual members of the meeting on the current monetary policy and possible options for changing it in the future.

Brexit remains another source of uncertainty. The UK and the EU are still unable to find compromise solutions on key issues. The parties have only three months left to conclude a trade agreement.


Australia - Reserve Bank of Australia Meeting

The market does not expect big surprises from the RBA meeting. After a sharp cut in the interest rate at the beginning of this year, the regulator took a wait-and-see attitude to assess the impact of the measures taken on the economy. The RBA is likely to keep the interest rate at 0.25%. The market reaction to this event can be rather restrained, unless the regulator makes any extraordinary statements, which is unlikely.



USA - FOMC minutes published

The FOMC minutes released on Wednesday are unlikely to surprise market participants. In the current situation, the regulator has a fairly limited set of tools for adjusting the main parameters of monetary policy. The regulator has been implementing a large-scale asset repurchase program for several months now, and interest rates are at a very low level. Earlier Jerome Powell has repeatedly stated that the Fed will adhere to a soft monetary policy for quite a long time. Obviously, we will not see any significant changes in the FRS rhetoric for the foreseeable future.



EU - ECB Statement on Monetary Policy

The rhetoric of the ECB is now not very different from that of the Fed. The regulator has been implementing a very soft monetary policy for a long time and has a very limited set of tools to respond to the new crisis. The interest rate is at 0.00%, and the regulator has no reason to start experimenting with a negative rate yet. Most likely, the regulator will keep the main parameters of monetary policy unchanged for a long time to come.