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Based out of Auckland, New Zealand, we bring an institutional trading experience to the retail market.

TMTG

Last Wednesday, Former US President Donald Trump announced the creation of his Media Company, Trump Media and Technology Group (TMTG) as well as its planned merger with Digital World Acquisition Corp (NASDAQ: DWAC).

Within four days, the NASDAQ-listed DWAC stock had grown by 740%. At the close of the Monday trading day (25/10/21), DWAC was trading at US $83.86. After-hours trading sees the stock up by 3.98% to US $87.20.

Arguable, DWAC price rise could be indicate it is the latest in a long line of ‘meme’ stocks, with retail traders ploughing into the stock for the sake of entertainment. Although, this might be a too-easy dismissal of Trump’s large popularity among Americans. He is, after all, the presidential candidate that garnered the second largest number of votes in US election history (after President Joe Biden, of course).

TMTG and DWAC would represent the only publicly-listed entity tied to Former President Trump (after the bankruptcy of Trump Hotel & Casino (NYSE: DJT)), and thus, demand from his supporters might be in line with DWAC’s price rise.

What we know about Trump Media and Technology Group ( TMTG )

TRUTH Social TMTG

TMTG is planning several launches over the next year. The first and perhaps most grandiose undertaking is a social media platform called TRUTH Social, set to be released at the start of 2022. It is unknown whether the platform will be based on Facebook (NASDAQ: FB), Twitter (NYSE: TWTR), or YouTube, all of which are sharing platforms that have banned the former Presidents profiles. As can be gleaned from Trumps Statements, Truth Social will likely imitate the likes of Twitter, with short, pithy Tweet-like posts referred to as TRUTHS.

What we know about Digital World Acquisition Corp ( DWAC )

Founded in 2020 and based out of a shared WeWork (NYSE: WE) office in Miami, DWAC is a Special Purpose Acquisition Company (SPAC) listed with the goal to merge with a US technology, fintech, or financial services business. DWAC is controlled by the founder of Benessere Investment Group, Patrick F. Orlando, and Luiz Philippe de Orleans e Braganca, a businessman and member of the National Congress of Brazil.

Orlando, acting as DWAC’s CEO, is a former derivatives trader at Deutsche Bank (ETR: DBK) and serial SPAC lister. While Orlando has launched four SPACs, raising hundreds of millions of dollars in the process, he has failed to push any of them over the line and complete a merger. With the stock price rally of DWAC, Orlando’s chances of achieving a SPAC merger are looking more probable than ever.

DWAC scepticism

DWAC has already generated its fair share of criticism for scant financial details and planning. Kristi Marvin, chief executive of SPAC Insider, notes, “We don’t know how they got to the valuation. We have no information … That’s the fundamental problem.”. DWAC merger deal with TMTG values it at US $875 million.

Truth Social TMTG

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!

Trading the US Election? Read this

We've talked about it for months. "There will be volatility coming into the election." "Safe havens may rally on the volatility." "The VIX is at an all time high."

Now we're in the neck of the storm. We are five days away from the election, and markets are trying to price in numerous possibilities alongside the Coronavirus's everchanging environment. In 5 days, we will know who will run the world's most influential country for the next four years.

Here's a couple of things you should know if you want to benefit from the possible wild swings the election may bring.

The day of the election

The election is on the 3rd of November, in the United States. However, there is a chance Trump contests the outcome if he does not win. If so, volatility in the markets may increase.

Spread are likely to widen

Spread during NFP an NFP annoucement

During market-moving events such as NFP and Central Bank, interest rate decisions affect respective currency pairs significantly. During these periods, traders and investors form their own opinion on what will happen and place trades. Therefore, Liquidity might be low, which may increase the spread (the difference between the bid and ask price).

During the election, there is a high chance fluctuation on who currently leads the race will occur, possibly whipsawing currency pairs as the votes come in.

This is important to note, as not only does this increase the cost of entering into a trade, but this may affect your stop losses and take profits. There is also a chance you hold your trade after market close on Wednesday; you may be charged with a triple swap.

Circuit Breakers may be triggered

You may remember, at the start of the year, when Coronavirus was slowly starting to pick up in the United States, the sharp market drops forced a halt in trading in equities due to the inbuilt Circuit breakers disincentivizing panic selling. For example, circuit breakers are set to halt trading in the S&P 500 when there is an intraday drop of 7%, 13%, and 20%.

During the election season, massive swings may force these circuit breakers off. This is likely not going to follow through in the CFD markets – however, this may force massive spreads when trading. Traders and investors should keep an eye out on the news during election day to avoid getting hit with high spreads.

Volatility may provide great gains, but also great losses

Many traders and investors enjoy trading wild swings because a lot of money can be made in a short span of time. However, this also means a large amount of money can be lost in a short span of time. Combine this with wide spreads, which may force many traders to hold onto traders to recoup the spread's cost to break even. It is essential to have a stop loss that mitigates your risk as much as possible, with suitable take profits to manage losses.

It will not be a surprise that volatility will increase on election day. The only thing you can control is how you trade the volatility. Will you take care of your risk?

Is the Australian dollar set to fall on a Biden win?

We are 13 days away from the election. Many polls state that Biden is winning the votes – however that’s what happened in the 2016 election. With big banks citing a decline in the Dollar over a Biden win, what will happen to commodity currencies such as the Australian Dollar and the Canadian Dollar against the US Dollar?

The Australian Dollar against the US Dollar has had a strong comeback, up 30% from its March lows. This was due to Australian commodity prices such as copper, nickel, and iron rebounding as manufacturing restarted worldwide.

Australian Dollar against green policy

If Biden were to be re-elected, a risk to the Australian Dollar is his supposed $2 Trillion push for a greener future, pushing initiatives that would create the opportunity cost for using cheap power sources such as oil and coal as supposed to greener alternatives such as solar and wind, lower. A report by BloombergNEF showed that the “Levelized cost of electricity for onshore wind projects has fallen 9% to $44 megawatt-hour since the second half of last year… with solar [declining] 4% to $50 a megawatt-hour”. They also cite that prices are lower in countries such as the United States, China, and Brazil, and that “Best in class solar and wind projects will be pushing below $20 per megawatt-hour this side of 2030”. This is not good for commodity currencies such as the Australian Dollar and the Canadian Dollar, as they are notoriously known to sell off when green policies are enacted.

Australian Dollar against the US Dollar may be bracing for a fall come election time in the US

Therefore, it is likely that the Australian Dollar will sell off if Biden is elected. Given a predicted selloff too in a US dollar, we may see the pair make a violent move to the downside. Near the end of September, we saw a selloff in the pair, retesting that healthy 0.7 support level. The AUD/USD has been ranging ever since between the 0.7 and the 0.725 marks. However, a Biden win may see the currency pair down to 0.6925, a historically strong support/resistance level, and a full Fibonacci retracement from 0.74 to 0.6925.

Are you looking at the Australian Dollar?

Pound Struggling to lift itself past 1.30

The Pound against the US Dollar is currently one of the most exciting pairs to be keeping an eye on, as it is essentially fighting between a rock and a hard place. Currently ranging just under 1.30, both nations have events coming up that will significantly shift the currency pair in either direction.

Pound against the US Dollar near that iconic 1.30 area

In the UK, we have Brexit negotiations affecting the Pound side of the equation. After the 30th of September passed, the UK is trying to buy time due to the worsening of the Coronavirus in Britain. There is pressure mounting onto Prime Minister Boris Johnson to ensure a deal goes through to avoid a compounding economic and human loss that a no-deal Brexit and terrible Coronavirus conditions bring to the UK.

Pound heavily dependent on Brexit results

According to a CNN Business analysis based on Citi and the Institute for Fiscal Studies forecasts, a no-deal Brexit could cost the UK economy $25 billion next year. Laurence Boone, Chief Economist at the Organization for Economic Cooperation and Development, stated that "The Combination of Covid-19 and the exit from the EU single market makes the UK outlook exceptionally uncertain" and that "actions taken to address the pandemic and decisions made on future trading relationships will have a lasting impact on the United Kingdom's economic trajectory for years to come."

Pound needs to worry about the US elections

The election is heating up with current polls across the Ditch, showing Biden taking a double-digit lead over Trump, with Joe Biden polling at 54%, and Trump polling at 43%. Biden seems to have the advantage over Black, Latinos, Whites with a college degree, and young voters. Conversely, Trump's strongest group continues to be White Evangelical Christians, rural voters, and whites without college degrees.

However, for both, the Coronavirus continues to run rampant. Unfortunately, investors and traders assume that America has given up on the Coronavirus and is learning to live with the virus. They can't get a second wave since they have not finished their first yet. Therefore, a second partial lockdown in the UK in response to the second wave has weighed on the Pound stronger than the US's long first wave.

As for the pair, a Biden Victoria plus positive Brexit talks should push the Pound higher, and the US dollar strengthens, moving past that strong 1.30 mark. However, a Trump win and further deterioration of Brexit talks should see the Pound weaken, and the US dollar strengthens.

Blue or Red - What do the markets want?

Coronavirus. Vaccine? Biden. Next President? Brexit. Done in our lifetime? With a lot of uncertainty and volatility in the markets, what party do the markets want?

NASDAQ inverted head and shoulders?

Equity Markets

The historical sentiment was as follows – A Democrat government is said to increase taxes and increase spending on the welfare, therefore fewer earnings for companies, hence prompting a sell-off. This is somewhat true, with Joe Biden planning to implement a 4 trillion dollar stimulus plan, alongside an increase in taxes for people who make over $400,000. However, this round may be a little different. With Donald Trump's Coronavirus' response regarded by many as the Achilles heel for the United States recovery, the markets are slowly accepting a potential Democratic sweet. Now, investors, analysts, and traders are trying to see what a Democratic government will be in the future. Goldman Sachs Analysts stated in a memo that "All else equal, such a blue wave would likely prompt us to upgrade out forecasts," citing that a stimulus package after January may "at least match" the downsides of a tax increase. So what are the Equity Markets looking for? Well, either really – either a Republican or Democratic government will see a stimulus bill come sometime soon. However, a Republican government will see a stimulus bill and security in lower taxes for the foreseeable future. Therefore, there is a slight tilt for Republicans to get into power for the stock market to push higher.

Commodity Markets

For Oil and Fossil fuel energy, it is relatively easy to discern that they do not want the Democrats to get into power. The reason? Biden's $2 Trillion climate change plan towards greener energy. This would prove detrimental to oil giants such as Exxon and Chevron and may prove deadly for the US Fracking industry. The transition from Fossil fuels to cleaner sources of energy is starting to take place alongside the eventuality of Fossil fuels being cycled out.

There was a scene in the TV show "Billions," where one of the main characters convinces a Fossil Fuel giant to start the green initiative – on the basis that they will be there first when the eventuality comes, and they stand to reap the most profit. Logically, this makes sense, and we are seeing giants such as BP take this approach. However, for their shareholders now, a blue sweep with wining profits and betting on an investment will pay off in a decades' time? Terrible for the stock and the prices of Fossil Fuels.

Oh, did we mention the effect of Covid-19 on oil demand?

For Gold, its market thrives on volatility, which is no doubt is going to get. As we head into the elections and the Fed continues to pump the economy, we should see certain tailwinds boost Gold. As for what the yellow metal wants to be in power? Unsure. Both Democrats and Republicans will have the Fed continuing to lift the markets alongside further stimulus, which should weaken the dollar and boost inflation.

Currency Markets

The US dollar wants the Republicans to get in, as a blue sweep may increase the costs of goods for exports out of the United States, therefore decreasing the demand for US goods. Many banks echo this sentiment, with Goldman Sachs, UBS, and Invesco Ltd predicting a weaker dollar on a Biden Lead.

 Volatility is coming – Stay Safe, Trade Safe.

Markets bounce back on stimulus hopes

Markets today bounced back as stimulus talks have come back into question. The NASDAQ is up around 0.7%, while the S&P 500 and the Dow Jones were up 0.8% and 0.43%, respectively.

NASDAQ in Blue, Dow Jones in Teal, SPX in Orange

This is after the Market's fell around 1.4% a couple of days ago on Trump's tweet, stating that he has entirely stopped stimulus talks, saying Nancy Pelosi has been negotiating in "bad faith." However, Trump has slowly come back on the statement, as Trump allies believe it may have created the political risk he'd be blamed entirely for the economic fallout. He told Fox Business that he has reinstated talks about a stimulus bill and is now "starting to work out." "We started talking, and we're talking about airlines and we're talking about a bigger deal than airlines. We're talking about a deal with $1,200 per person, we're talking about other things."

The contested stimulus bill was between the Democrat's $2.4 Trillion dollar proposal versus the Republican's $1.6 Trillion dollar proposal. The Democrats have countered with $2.2 Trillion. However, the white house has not provided a counteroffer to that proposal. Nancy Pelosi is also pressing for language in the bill to limit Trump's ability to deliver virus testing and treatment funds to other projects.

Oil Markets seeing a rise

WTI up 3.3%

Furthermore, we saw Brent Crude and WTI rise around 3.3% as energy companies on the Gulf coast evacuated 183 offshore oil platforms and halted nearly 1.5 million barrels per day as a safety precaution to Hurricane Delta. WTI and Brent are hovering around $41.25 and $43.32, respectively.

Europe Markets seeing a slight sell-off

In the European markets, we saw the EUR/USD sell-off after ECB officials signaled that they were ready to ensure inflation moved towards their mandate, including slashing their already negatives rates and broadening their Targeted Longer-Term Refinancing Operations (TLTRO's), which stimulates banks to lend. EUR/USD is down around 0.2%.

Is it Gold's time to shine?

Gold is up nearly 3% in the past couple of days as President Donald Trump's hospitalization due to him contracting the Coronavirus shook the markets. Like many times this year, Gold has been an anchor on volatility, providing stability in a portfolio when markets dive. However, what about the factors that are usually discussed to propel Gold past its previous highs?

We talked about the tailwinds for Gold previously; its link with inflation, dollar devaluation, future volatility, and positive sentiment. Are we starting to see these catalysts come into fruition?

Dollar Index up 2.6% on volatility in the past couple of days

Inflation

In short, people believe that Gold is a good hedge for inflation instead of holding the U.S. dollar or U.S. denominated bonds. This because Gold is said to hold value better than the U.S. dollar does in inflationary periods.

Inflation Rate has fluctuated above and below the Fed's mandate of 2%

In the past ten years, we saw inflation fluctuate between 1.5% and 2.5% as the Fed attempted to maintain its mandate of 2% inflation each year. However, with the Fed's new "tool," allowing inflation to hover above their 2%, investors and traders are looking out for inflation to creep up in the future slowly. Furthermore, the Federal Reserve's balance sheet continues to creep up, with them vowing to use all their tools at their disposal to spur the American economy, has the implicit consequence of producing inflation.

So far, we've seen inflation come up from its March lows when the Coronavirus started to hit the economy. It is currently sitting at around 1.7%, from 1.2% in March.

Are we starting to see the catalyst for inflation for Gold? In the current environment, No. Economic activity would need to pick up to relatively normal levels for inflation to spike. However, once a vaccine is on the Horizon, be prepared to look at this catalyst repeatedly.

Dollar De-valuation

On the face of it, the dollar index is only down around 3.2%. However, from its March Highs, the Dollar Index is down around 8.8%.

Dollar Index over 20 years

Ever since the Dot Com Bubble, we've seen the Dollar lose over 40% of its value between 2002 and the Global Financial Crisis in 2009. Ever since then, it has never regained the highs seen in 2002 since. Analysts believe if the Federal Reserve continues to prop up the economy with unprecedented quantitative easing and low rates, we may see the Dollar hit levels similar to that in 2009, down around 30% from current levels.

Interestingly enough, attention has been placed on the Federal Reserve on the devaluation of the Dollar. However, there have been many macroenvironmental factors pre-Coronavirus that have been headwinds for any appreciation of the Dollar, such as the historically low-interest rate incentivizing spending instead of saving, and public debt continuing to skyrocket.

We experienced a devaluation of a similar magnitude between the 1970s and 1985, and between 2002 and 2009, where the dollar index fell double digits. However, current saving rates and public debt were relatively higher than what it currently is.

Are we starting to see the catalyst for the devaluation of the U.S. dollar for Gold? Most likely. The pre-Coronavirus factors have been weighing on the Dollar's firm valuation – The Fed's stimulus may be the nail in the coffin.

Volatility in the markets

Oh yes sir boy – with the Coronavirus showing that it does not discriminate after it infected the President of the United States and multiple world leaders in the past year, markets have been all over the show. For example, in the past two days, Brent Crude has experienced wild swings, down 5% yesterday, and now up 6% today.

With the elections coming into swing, alongside Coronavirus shocks just like the one we had with President Trump, are we starting to see the Catalyst of Volatility for Gold? Most certainly. If this is your premise for going long Gold, this may be the optimal time to enter that trade.

Positive sentiment for Gold

Over the past year, we've seen a legendary Gold bull run, primarily due to investors and traders looking at historical tailwinds for Gold and identifying that those factors may be on the Horizon. Furthermore, the barrier to entry for trading investing for retail traders has become non-existent due to the recent "game-ification" of the investing and trading world. Therefore, an influx of retail money has plowed in Gold-Backed ETF" s in the past year, pushing the yellow metal prices higher.

Are we starting to see the catalyst of positive sentiment for Gold? Well, we have already seen it. Since the start of the Coronavirus, there has been much love of the yellow metal. And it seems like that love is still there, so we can say that Gold's catalyst is still ongoing.

Gold: Soft headwinds, strong tailwinds

With not many headwinds for Gold, and a multitude of future and ongoing tailwinds, this is something you should be keeping an eye on.

Your week ahead – Trump and the "China Virus"

Just as you think things couldn't get weirder – arguably the most powerful man in the world, President Donald Trump, and the First Lady contracted the Coronavirus. This is after their aide, Hope Hicks, was stated to have contracted the Coronavirus the day before their announcement. This week ahead could be interesting.

There have been conflicting accounts to Trump's health (depending on the source of news you choose to absorb). To add to this, Trump's leading health officials have been giving conflicting and confusing information to the public, confusing press officials, the people, and the markets. Sean Conely, the White House Physician, told reporters that the President was receiving oxygen, after stating that he had not been treated to oxygen on Friday. He admitted to sharing misleading information initially to "reflect the upbeat attitude" of Trump and his doctors. However, he does state he is "doing really well."

Donald Trump has received three different drugs during his stay at Walter Reed National Medical Center. He first received a dose of experimental medicine by Regeneron Pharmaceuticals Inc before making his way to the hospital. During his stay at Walter Reed, he has been given Remdesivir and dexamethasone.

Futures were all over the show, initially dropping hard over uncertainty, however rebounding on positive news on his health. Expect an extremely volatile week ahead, as we slowly hear word on Donald Trump's health. Here is your week ahead.

Aide Hope Hicks and President Donald Trump both test positive for the Coronavirus

Monday 5th October, Tuesday 6th October and Wednesday 7th October – US ISM Non-Manufacturing Index, Fed Chair Powell Speech and FOMC minutes

The US dollar and the United States Equities need upbeat news to balance any negative news regarding Trump's condition. Trump has been hard at work while in hospital trying to continue his duties, mainly to dot the I's and cross the T's on a second stimulus bill, which the Federal Reserve believes is required to pull the United States economy out of the slump it is in.  However, Non-manufacturing ISM's are expected to print a slightly bearish figure of 56, down from 56.9 the month before.

Alongside the ISM figures, Federal Reserve Chairman Jerome Powell is set to speak, providing further guidance on the American Economy's future. We should see Powell give support for more fiscal stimulus from the government. However, a more than expected dovish tone and less than expected financial support from the Jerome Powell and the FOMC minutes should see equities fall, considering the weak fundamentals and volatility Trump's hospitalization brings.

Tuesday, 6th October – RBA Interest Rate Decision and Government Budget Release

Australia is slowly coming out of its second wave as cases calm down in Victoria. Talks of a Trans-Tasman bubble between New Zealand and Australia have come back, with citizens who have not been in a designated Coronavirus hotspot in the past 14 days will be able to travel into New South Whales and the Northern Territory. It is interesting to note that the bubble will only be one way – with New Zealanders being able travel to Australia. However, Australian citizens would not be allowed to travel to New Zealand. Tickets are costly at around $900 NZD for a one-way ticket to Sydney. Seven out of the 11 economists at UBS Group expect the Reserve Bank of Australia to expand their quantitative easing, alongside a heightened possibility for the RBA to cut rates in the next six months. However, the Governor of the RBA, Philip Lowe, has pushed back against negative rates, stating that negatives rates are extraordinarily unlikely in Australia due to downsides on consumption and sentiment.

This is after a farewell email was sent to staff by Peter Tulip after he resigned in August, stating that the Reserve bank has a board "that does not understand monetary policy or statistical research" and that "..although there are lots of great people at the bank, our environment makes the organization dysfunctional". Rates in Australia are currently at 0.25%, with a consensus for rates to stay the same.

Wednesday 7th October - ECB President Lagarde Speech

The main interest investors and traders should look out for when ECB President Christine Lagarde speaks later this week is implementing a potential digital currency. This would be an attempt to further push their quantitative easing in all of their nooks and crannies of the European Economy. Christine Lagarde state that "Europeans are increasingly turning to digital in the ways they spend, save and invest" and that "[the bank's] role is to secure trust in Money.. making sure the euro is fit for the digital age". They are set to go two directions; one would use a centralized system similar to how cash is handled today. The alternative would be a decentralized system with rules, identical to cryptocurrencies such as Bitcoin – however, it would not be self-governing. Instead, it would be governed by third parties. They expect to decide whether to implement a digital euro after the public consultation in mid-2021.

Christine Lagarde is also set to touch on the European Economy and its current road to recovery alongside recent Euro strength.

Thursday,  8th October – Bank of Canada Governor Macklem Speech and Unemployment rate

A couple of weeks ago, the Bank of Canada kept rates at historically low levels at 0.25% and continued to see an increase in holdings of government bonds as they continue to propel the Canadian Economy. Tiff Macklem, Governor of the Bank of Canada, stated in a speech that the Bank of Canada "will be supporting the economy through the full length of the recovery, helping to bring it back to full capacity with full employment." They plan to keep interest rates at unpreceded levels until excess capacity is absorbed and inflation targets are reached. Expect Macklem's speech to be much of the same, reiterating its support for the Canadian Economy. Any deviation may see wild swings in Canadian Dollar pairs.

Eyes on the news this week, particularly on Trump's Coronavirus recovery. Stay safe, Trade Safe.

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.