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Week ahead – United States Election!

With over 93 Million US Citizens voting early, surpassing two-thirds of all 2016 and consisting of 43% of registered voters, the United States election is finally two days away this week ahead. Many regard this as one of the most important Presidential Elections in history, possibly changing society's fabric in the United States for the foreseeable future.

Although the Presidential Election will probably get most of the attention, this week continues to be eventful with a lot of data being released. Here is your week ahead.

Dates are in NZDT.

FiveThirtyEight predicts in 20 out of 22 scenarios Biden will win the Presidency

Monday, 2nd November – US ISM Manufacturing

A key point in Trump's campaign in 2016 was his promise to bring jobs back to America. However, an amended NAFTA agreement, alongside many more amendments to foreign policy, has lost many manufacturing jobs. For example, over one in four Michigan manufacturing jobs have been lost since the NAFTA agreement amendment.

The Coronavirus has just brought more pain to the sector, with an estimated 381,000 manufacturing workers in Michigan, Ohio, Wisconsin and Pennsylvania were laid off or furloughed – with all, but one (Pennsylvania) states being in the midwestern part of the USA. These states were one of the key reasons why Donald Trump was elected in 2016.

As states slowly open up, the Coronavirus continues to run rampant, affecting workers employed in the manufacturing sector. Unlike the tech and finance sector, manufacturers can not work from home. With that said, the US's ISM is predicting to increase slightly from last month to 55.6 this week ahead, as suppose to 55.4 last month.

Tuesday, 3rd November and Wednesday, 4th November – RBA Interest Rate decision and Australian Retail Sales

Australia reached a positive milestone yesterday – zero community transmission. The country has a long road to recovery ahead of them, and the Reserve Bank of Australia acknowledges that. With dovish tones in the previous RBA minutes, analysts predict a 150 point basis cut, from 0.25% to 0.1% tomorrow. However, Insight Manager at Finder, Graham Cooke believes that further cuts will not make dramatic changes to the finances of ordinary Australians, stating that "a further 10-15 point basis cut us unlikely to have much of an impact on the economy –however, our experts seem to think that the RBA is in "every little bit helps" mode."

Furthermore, Retail Sales will also be released a day after the decision. Analysts predict a further 1.5% decline in Retail Sales as the Coronavirus continues to take a longer-term toll on employment.

Wednesday, 4th November – US Presidential Election.

The event everyone and I mean everyone, including your mother, will be watching.

There is nothing much to say about this other than to buckle in. Many polls state that Biden is likely to win. FiveThirtyEight predicts that in 20 out of 22 scenarios, Biden is stated to win. Other polls from firms such as RealClearPolitics see Biden leading over 9%.

Judging by the polls, the only way Trump can win is if he wins all of the swing states. The popular vote in NYC and California have Biden to win anyways, which means the popular vote will be absorbed within the Electoral college (tl:dr, the RealClearPolitics poll may be closer than is stated).

However, the polls showed Hillary winning in 2016. And we all know what happened then.

Friday, 5th November – Bank of England Interest Rate Decision

The UK struggling with lackluster leadership

The UK has finally imposed a stricter lockdown (however, not a full lockdown) on citizens for one month, with analysts predicting that the lockdown may be extended further to allow the UK to have their Christmas not under lockdown. The Bank of England is set to inject over 100 Million pounds buying back bonds to fight the second wave.

However, this may not be enough, with analysts at HSBC predicting that the BoE's bond-buying regimes are "running out of room," which may leave the central bank with no choice but to implement negative rates. Governor of the Bank of England, Andre Bailey, has not ruled negatives rates but has described evidence of their effectiveness as "pretty mixed" and that negative rates might be most effective when an economy is in a recovery phase for the economy to take full advantage of the negative rates. Analysts predict rates to stay at 0.1%.

Saturday, 5th November – US Non-Farm Payroll

A key indicator showing how well the US economy is recovering, Non-farm payrolls is predicted to print 700,000 new jobs, up from 661,000 the month before.

This week ahead is going to be a turbulent one. Strap yourself in, and brace for the ride.

Stay safe, Trade safe. Have a good week!

Week ahead - Trump, Uncertainty and Volatility

It is officially five weeks out until the United States Election. Expect an increase in volatility in the markets as we get closer to the official election dates. It is interesting to note that New Zealand's elections will be held two weeks after the US elections – throwing an extra spanner in the works. Here is your week ahead.

Trump and Biden are set to clash it out

Dates are in NZDT.

Wednesday, 30th September – First U.S Presidential Debate

Usually hosted in front of a crowd, the Coronavirus has put this tradition on top of its head like many other in-person events. There will only be one moderator, with Joe Biden and President Donald Trump going at it for one hour. A crowd? Possibly, Possibly not. If so, it would be strictly limited. The first moderator will be Chris Wallace, the anchor of "Fox News Sunday." It is predicted that the topics will revolve around the financial record for both Trump and Biden, the Supreme Court, the Pandemic, the economy, race and violence in cities, and the election's integrity. Both candidates will have 15 minutes to answer each question. Traders and Investors should be careful trading around this time, as markets are bound to shift either direction depending on the topic in question.

Wednesday, 30th September – China's Non-Manufacturing PMI

After flattening the curve, China has set an example of how a large population deals with the Coronavirus. (I'm assuming they're not lying about their results.) This has enabled the country of almost 1.4 Billion to start restarting their economy a lot earlier than their peers. For comparison, India continues to rack up daily Coronavirus cases with a population similar to China. They currently sit at around 6m Coronavirus cases, in contrast to China's stated 85k cases. China's Non-Manufacturing PMI is set to soften, from 55.2 last month to 52.1. Look for movements in the offshore USD-CNY pair in the week ahead.

Wednesday 30th September – UK's GDP Quarter over Quarter

UK's Coronavirus cases

If there is an example of a "second wave" of the Coronavirus, The United Kingdom exemplifies it. With Prime Minister Boris Johnson forcing drastic measures to stop the Coronavirus, including forcing pubs to close at 10 pm, urging workers to work from home, and many limits regarding groups. GDP is expected to drop -20.4%, similarly in the last quarter. Boris insists that there will not be a second lockdown.

Wednesday 30th September - Europe CPI

Europe has had a relatively valiant effort with regards to the Coronavirus. Although many countries have seen spikes in cases in the past couple of weeks, government and central bank stimulus have supported the European economy as much as possible. With fears of a strengthening in the Euro slowing the recovery, it is to be seen whether the ECB or Government will weaken the Euro. The CPI is set to rise this month from 0.4% last month, to 0.7% this month.

Wednesday, 30th September and Friday 2nd October – United States GDP Q2 and Non-farm payroll

US Coronavirus cases

We talked about the United Kingdom having a second wave – it seems like the United States hasn't even finished its first one. Cases continue to pile up, with total cases at 7.1 Million. Furthermore, it looks like the President has fully put the Coronavirus on the side as he focuses on the upcoming debates and elections. Furthermore, with his tax returns being released by the New York Times, more pressure is being placed on the President to answer – diverting even more of his attention away from the mounting deaths in the United States. GDP in the second quarter is set to contract 31.7%. Furthermore, even as citizens in the United States slowly go back to work, Non-farm payrolls are set to fall from last month, with a 1.371 Million Non-Farm Payroll's previous month to an estimated 875k this month.

Friday, 2nd October – Australian Dollar Retail Sales Month over Month

Australia, too, experienced a second wave just like the United Kingdom. However, Australia's second wave was larger than the first, as the State of Victoria saw a massive spike a couple of weeks ago. This forced the state to go into a second lockdown, which brought daily numbers down to more manageable levels. Their swift control of the second wave has the Trans Tasman bubble between it and New Zealand revived, with reports stating that it could be just weeks before Australians and New Zealanders can travel to either country. Total Coronavirus Cases in Australia is 27,040, with 872 deaths. With the Australian Government provided 80% wage subsidies, Retail Sales should not take a massive hit this week ahead as citizens continue to online shop. A surprise uptick in retail sales should see a spike in the Australian Dollar against the greenback.

An exciting week ahead. Stay Safe, Trade Safe.