The week begins with new socio-economic lockdown measures in Europe, increasing caution among investors who were hoping for recovery at pace.
New restrictions in Europe
Germany, France, the United Kingdom, Italy, Spain, and the Netherlands announced new measures to contain record-rising Covid-19 infections. Several European countries reported that new record daily infection figures were recorded over the weekend.
This is causing many market watchers to worry that the European economy is heading towards a double-dip recession. Economists warn that rising coronavirus infections and new government restrictions are likely to hinder the final recovery in the eurozone.
Germany ordered 26 million flu vaccines before winter in the northern hemisphere starts, while the British government said it aims to vaccinate 30 million people this year.
In the United Kingdom, Andy Burnham, mayor of the worker-dominated Greater Manchester Metropolitan Area, entered into a fierce showdown with the central government as London put the region on the highest Covid-19 alert amid growing north-south tensions over restrictions.
US presidential debate
US President Donald Trump will face his Democratic rival Joe Biden on Thursday for a final debate before the November 3rd elections.
The two will try to grab voters’ attention at the event to be held at Belmont University in Nashville and broadcast by NBC News.
As the race approaches its end, Biden maintains his wide lead in the polls nationally and in swing states.
US aid package talks
Talks on a new federal government stimulus package are planned to continue this week in the United States, the world’s largest economy where the coronavirus has caused the highest financial and life loss.
Trump said at the weekend that he was ready for a compromise with the Speaker of the US House of Representatives, Democrat Nancy Pelosi, and claimed that he was for even a bigger aid package than hers.
Trump’s current bid is at 1.8 trillion, while Pelosi’s stands at 2.2 trillion dollars. Trump also has to make his offer acceptable to the congressional Republicans. Senate Majority Leader Mitch McConnell has repeatedly told Trump that he could not sell the Republican team such a large package.
According to the Wall Street Journal, Pelosi gave the White House a deadline until Tuesday for a deal with Trump’s chief negotiator, Treasury Secretary Steven Mnuchin after the duo talked again on Sunday.
Mnuchin’s planned tour of the Middle East this week, encompassing Israel, Bahrain, and the UAE, further shrinks the time to negotiate a new aid package that American households, workers, and businesses are eagerly awaiting.
Monday: Fed Chair Powell Speaks, ECB President Lagarde Speaks
Tuesday: RBA Meeting Minutes, PBoC Loan Prime Rate
Wednesday: UK CPI, ECB President Lagarde Speaks, Canada Core CPI, US Crude Oil Inventories
Thursday: UK Retail Sales, BoE Gov Bailey Speaks, US Initial Jobless Claims, US Existing Home Sales, New Zealand CPI
Friday: UK Retail Sales, German Manufacturing PMI, German Ifo Business Climate Index, UK Composite PMI, Manufacturing PMI, Services PMI, UK Autumn Budget