Worst-case scenario, Bank of England, Fed and NFP ahead

6 Kas 2020

The events surrounding the US elections are developing according to the worst-case scenario. And it is very strange to see a flash of optimism in the financial markets. Biden is winning (looks like), but Trump has already said he will challenge the election results.

Given that the country is essentially divided into two poles, the discontent of Trump supporters may well lead to a full-fledged crisis in the country. It is enough to recall the massive protests within the BLM movement this year to understand one simple thing: pandemic, lockdown and economic crisis released all the negativity that had been accumulating in people for years.

So, news like this: "About 200 Trump supporters, some of whom were armed with rifles, gathered on Wednesday near a polling station in Phoenix, Arizona" should not be taken as part of a paranoid conspiracy theory. Today or tomorrow, this may become a new reality, in which all these BLM movements and looting associated with it seem like child's play (about 70 million people voted for Trump).

Taking into account all of the mentioned above, we believe that buying in the US stock market and actively selling the dollar, the markets are very mistaken and the situation can turn around literally at any time.

Speaking of other events of the day yesterday, we note the lack of progress in negotiations on Brexit, as well as the decision of the Bank of England to increase the volume of purchases of assets by 150 billion pounds (195 billion dollars) to 895 billion pounds.
The Fed decided not to change anything yet. They are waiting for the outcome of the elections, as well as the development of a pandemic situation.

According to the autumn forecast from EU, the economy of the Eurozone in 2021 will grow by only 4.2% instead of the previous estimate of 6.1%.

The data on jobless claims in the United States came out on the whole quite good, but there is not much to be happy about either.
However, today the official statistics on the US labor market will be published, which traditionally arouses heightened interest in financial markets.