Here is what you need to know on Wednesday, September 9:
The market mood remains damp amid the sell-off in tech stocks, Brexit issues, the US fiscal impasse, and AstraZeneca’s halt of its coronavirus vaccine trial. The dollar and yen are gaining ground while stocks and oil are on the back foot.
Vaccine worries: AstraZeneca paused its Phase 3 COVID-19 vaccine trial after one person participating in the experiment fell ill with inflammation in the spinal cord. The immunization project is considered one of the most advanced among eight that are in the final testing phase. The news exacerbated the falls in stocks and kept the safe-haven dollar and yen bid. Pharma firms involved in developing vaccines pledged not to seek emergency approval before vaccines proved to be safe.
Tech sell-off: Elon Musk’s Tesla stood out in the ongoing reversal in technology stocks, with NASDAQ flirting with correction territory.
Gold has been stabilizing around $1,930, shaking off its correlation with equity markets.
US fiscal stimulus: Congressional leaders are reportedly hardening their stances, with Republicans suggesting a modest $500-700 million bill – lower than beforehand. House Speaker Nancy Pelosi said the idea is “an insult to Americans’ intelligence.” The stalemate is adding pressure on markets.
Brexit: A government minister has admitted that new Brexit legislation would break international law, causing worries on both sides of the Channel. France said that a deal remains unattainable if Britain opposes a level playing field.
GBP/USD is trading below 1.30, also due to rising UK coronavirus cases. Prime Minister Boris Johnson is considering slapping a night-time curfew on several cities.
The Bank of Canada is set to leave its interest rate unchanged at 0.25% while reiterating its commitment to keeping policy accommodative. The BOC is unlikely to change its guidance regarding asset purchases.
See Bank of Canada Rate Decision Preview: Inflation worries and the zero bound
EUR/USD is trading below 1.18 ahead of the European Central Bank’s meeting on Thursday. The ECB is set to leave its policy unchanged and may comment on the exchange rate and the Federal Reserve’s dovish shift. Remarks on the current economic situation – which has become more uncertain as cases continue rising – are also of high interest.
Oil prices remain on the back foot, with WTI changing hands at below $37. The general risk-off mood and less buying from China are weighing on the black gold.
Cryptocurrencies continue struggling with Bitcoin trading near $10,000, Ethereum under $350, and XRP under $0.24.
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