US election overshadows GDP growth

Key Movers

Ongoing Brexit negotiations continued, and France played very hard ball in discussions. President Emmanuel Macron’s rhetoric has been stern and forthright, and now the European Affairs Minister Clement Beaune warned the British government to ‘play no games’ with only a ‘few days’ remaining to conclude Brexit negotiations with a deal. There is a sense that Prime Minister Boris Johnson has softened his stance a little in the last few weeks and a deal could be likely, which could benefit the pound. However, the risks of a no-deal Brexit remain very real, leaving us with volatility heading into the December deadline.
Johnson announced a month-long lockdown to combat the significant rise in coronavirus cases. The furlough scheme and some other financial incentives from the UK treasury are being extended, and schools and universities will remain open, unlike the first lockdown. Sterling opened this morning already under pressure from the news, which is bound to have a significant impact on economic activity heading into Christmas.
The AUD slid further down on Friday against the USD, in a much similar fashion as it had throughout the week ahead of the Royal Bank of Australia interest rate decision on Tuesday. There are expectations that the RBA will announce a second rate cut for 2020 lowering it to a record low 0.10% from 0.25%. We can also expect to see some further volatility with the US Presidential Election happening the day after.