Financial Markets Daily Report27 October 2020
Investors started the week on a risk-off mood. Amid rising coronavirus cases, tighter mobility restrictions in Europe and little progress in U.S. fiscal stimulus talks, volatility spiked and stock markets slumped across the board.
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- Investors started the week on a risk-off mood. Amid rising coronavirus cases, tighter mobility restrictions in Europe and little progress in U.S. fiscal stimulus talks, volatility spiked and stock markets slumped across the board.
- In FX markets, the USD strengthened against AE and EM currencies, while in fixed-income markets safe-haven flows drove U.S. and German sovereign yields down. Euro area peripheral spreads were little changed as investors digested S&P's outlook improvement to Italy's sovereign rating last Friday.
- A lower risk appetite also triggered losses in commodity markets, and the price of the barrel of Brent dropped towards $40.
- On the data front, Germany's business sentiment fell for the first time in six months in October according to the Ifo index (92.7 points, down from 93.2 in September).