Daily summary: US stocks drift as Powell urges more stimulus spending

• ECB President Lagarde hints at fresh stimulus
• Powell advocates for doing more stimulus rather than less
• Delta has intensified to a category 4 hurricane

European indices managed to erase early losses and finished today's session mostly higher. Markets shrug off dovish comments from ECB President Christine Lagarde's and mixed economic data from the Eurozone. ECB is ready to unleash further stimulus to support the bloc's economy, including  the reduction in interest rates significantly into negative territory. On the Brexit front two diplomatic sources told Reuters that the UK and the EU were close to reach an agreement on trade. Meanwhile, UK Chancellor Sunak's warned of rising unemployment in the coming months. Airline stocks rose after British government suggested it could introduce Covid-19 testing for international arrivals in an effort to cut the 14-day quarantine period.  On the data front, German factory orders in August came in above expectations, while PMI survey showed the Eurozone's construction sector contracted in September for a seventh consecutive month. During today’s session Dax rose 0.6%, CAC40 gained 0.5% and FTSE100 finished 0.12% higher.

US indices continue to trade mixed after Federal Reserve Chairman Jerome Powell called for continued aggressive fiscal and monetary stimulus for an economic recovery that he said still has “a long way to go”, saying that too little support would lead to a weak recovery, while the risks of overdoing it seem to be smaller. Noting progress made in job creation, goods consumption and business formation, among other areas, Powell said that now would be the wrong time to for policymakers to take their foot off the gas. Meanwhile, investors focus on stimulus talks after President Trump left the hospital on Monday, where he was treated for coronavirus. Stimulus deal still have not been struck and the House Speaker Nancy Pelosi and the Treasury Secretary Steven Mnuchin plan to speak again today.  Nasdaq is trading slightly lower as news emerged that a US House of Representative is planning to implement new legislation in order to  prevent companies like Amazon or Apple from owning marketplaces and selling their own products on them.

 

Oil prices pushed higher Tuesday as energy companies in the US Gulf Coast evacuated offshore oil platforms as Delta has intensified to a category 4 hurricane and is scheduled to reach Louisiana early on Saturday morning. Ongoing labour strike in Norway over pay, which has shut six offshore oil and gas fields also supported prices. The American Petroleum Institute will release its weekly assessment of U.S. oil inventories at 21:30 BST, while the U.S. government also releases its regular Short-Term Energy Outlook.
During today’s session U.S. crude futures rose over 3% at $40.51 a barrel, while the Brent contract rose 2.8% to $42.44.
Elsewhere, gold was little changed above $1917 an ounce while silver is trading  1.18% lower at $23.89 an ounce.

USDCHF – pair broke below the major support level at 0.92 yesterday and is currently testing the 50 SMA (green line). Should downbeat moods prevail, next support at 0.90 may be at risk. Source: xStation5

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