Daily Summary: Global stocks higher ahead of FOMC meeting

• European Commission lowered its GDP forecasts for 2021
• Biden leads US presidential election
• Federal Reserve FOMC meeting

 

European indices extended recent gains supported by upbeat quarterly reports from Societe Generale, UniCredit, ArcelorMittal and ProSiebenSat.1 Media. Also news regarding additional monetary and fiscal stimulus for Britain's economy lifted market sentiment. Bank of England increased its bond-buying program by a larger-than-expected £150 billion, but warned that Britain's economy is expected to shrink by 11% in 2020, compared to a 9.5% contraction predicted in August. On the data front German factory orders and Eurozone retail sales figures disappointed. Also European Commission lowered its GDP forecasts for 2021 saying  the resurgence of the pandemic in recent weeks is resulting in disruptions as national authorities introduce new public health measures to limit its spread. According to the new forecasts, Eurozone economy would grow by 4.2 % in 2021, compared with previous estimates of a 6.1% expansion. Meanwhile Covid-19 continues to surge across Europe. Today Germany, Poland and the Czech Republic all reported record-high daily cases and Greece becoming the latest country to declare a 3-week national lockdown. During today's session DAX 30 rose 1.9%, CAC 40 gained 1.24 % and FTSE 100 finished 0.39% higher.

US indices are trading higher as investors await the outcome of the presidential election while Arizona, Georgia, Nevada, Pennsylvania and North Carolina are still counting votes. Biden continues to lead with 264 electoral votes while Trump swept up 214 votes and his campaign already filed lawsuits and demanded a recount. Also possibility that the Republicans will retain control of the Senate eased worries of major policy changes that could hurt corporate America under a Joe Biden White House. Meanwhile US reported record number of 102,831 new COVID-19 cases yesterday. Colorado, Indiana, Maine, Minnesota and Nebraska registered a single day case record on Wednesday and thirty-six states have recorded more cases in the past week than in any other seven-day stretch. According to seven-day average, the number of current hospitalizations in Missouri, Alaska, Ohio, Iowa, Indiana, Minnesota, Nebraska, North Dakota and New Mexico reached new record highs. On the earnings front, Qualcomm and General Motors both reported better-than-expected quarterly earnings. Meanwhile, traders will keep an eye on Fed's monetary policy decision later in the day with the central bank likely to repeat a pledge to do whatever it can to help the economy. Coverage of this event will be available on our website.

U.S. crude futures are trading 0.8 % lower, while the international benchmark Brent contract fell 0.58 %. Elsewhere, gold futures rose 2.30% to $1,947/oz, while silver jumped over 5.0% as the US dollar continues to weaken.

AUDUSD - pair bounced off the earlier broken downward trendline which is additionally strengthened by 50 SMA (green line) and is currently testing local resistance at 0.7253. Should buyers manage to uphold momentum then upward move could be extended towards 0.7412 resistance level. However, if there is a change in market sentiment then nearest support is located at 0.7133. Source: xStation5

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