It turned out that a so-so Non-Farm Payrolls report, the last before the presidential election, was not the worst piece of news that broke for the White House on Friday. Over the weekend, confusion reigned over President Trump’s health status but doctors have attempted to clarify the situation and his condition appears to have improved—to the point that reports over the weekend suggest he may be discharged as soon as today. The broader risk mood has also recovered alongside comments from Speaker Pelosi Sunday indicating that lawmakers were “making progress” on more US stimulus—although real signs of progress remain somewhat elusive. European cash equities are firmer while US equity futures have strengthened. Energy prices are firmer and bonds are mostly better offered. The USD has slipped generally but the JPY has reversed Friday’s gains to under-perform broadly versus the G10 bloc. If the President’s condition continues to improve (or at least does not deteriorate), focus in the early part of this week is likely to shift more toward the situation regarding fiscal relief, so the risk undertone remains vulnerable to headline risk and disappointment. The data calendar is relatively light but there is a sizeable helping of Fedspeak this week— including Evans (today) and Powell (Tuesday) at the NABE conference. Slippage in the USD broadly last week suggests some consolidation in recent gains. But we look for the USD to remain well supported on softness in the short run and still rather expect the USD to firm ahead of the US elections in early November.
In my work I follow with good earnings.
