New data on unemployment in the United States

Financial and commodity markets analytics

Market Watch review. 09.10.2020

In today's release, we’ll cover the following topics:

  • Abnormal growth of the ECB balance. 
  • New data on unemployment in the United States. 
  • The US election race and Donald Trump's fresh rhetoric. 

The European regulator increased its balance sheet by a rather significant 170 billion euros, compared to a week earlier, the increase was only 32 billion, which is FIVE times less. Thus, the ECB now has almost 7 trillion Euros (6.705 trillion) on its balance sheet, this is the second most powerful injection of monetary liquidity after the global lockdown (since the summer). The first one was on June 26, when the balance increased by 600 billion euros.

As we know, such a sharp increase in the amount of money printed negatively affects the value of the national currency – we see this in Euro quotes.
While Europe is accelerating the economy with new printed money on the neighboring continent, on the contrary, at the request of the current President, such incentives are postponed until the end of the elections. Before we move on to the specifics of the election race in the United States, we will look into the latest data on applications for unemployment benefits.
The number of US citizens who applied for benefits over the past week was 840 thousand people against 849 thousand people a week earlier. Before the crisis, four times fewer Americans (just over 200,000) applied for this benefit every week. This positive dynamic in the segment will be present if repeated quarantine measures are not introduced in the United States, which is not currently being discussed.

Moving to our last topic, the US election race and the latest statements of the current US President Donald Trump. In the first place, his yesterday’s message that since the American people are not to blame for anything, and the culprit of mass infections is in China, the treatment for all Americans will be free. Donald Trump, who has contracted the coronavirus, promised to provide US citizens with the same treatment for COVID-19 that he received himself, as well as to supply experimental drugs that he took to free hospitals. Of course, if he is re-elected.

The last statement worth mentioning in today's review is the unilateral cancellation of the debate with Joe Biden. Instead, Donald plans to hold a rally before issuing numerous negative tests. We see that the election race has entered its final stage. We will be receiving a stream of the most interesting news daily now.

Closely monitor the news background and be prepared for all the surprises of the market.