The US’ economy recovered more than 80% of its decline, driven by a bounce in consumer spending and a pick-up in housing activity, according to the latest GDP report. Real GDP rose 7.4% quarter-on-quarter in 3Q20 (following a 9% QoQ drop in 2Q20), which translated into a 2.9% decline in annual comparison (an improvement compared with the 9% YoY contraction seen in 2Q20). Going forward, developments in the labour market will be key for future GDP growth. The downside risks stemming from a weak jobs market could be mitigated by another economic relief bill – the timing of which remains unclear.
America votes on the 3rd November. Just a day before the US Presidential elections, former Vice President Biden maintains an 8-point nationwide lead over President Trump, according to the latest Reuters/Ipsos poll taken 27-29th October. Reuters/Ipsos polls also show that over 75% of American voters are concerned about the health crisis and almost 60% disapprove of the way President Trump has been handling it. According to various state polls, Mr Biden is more likely to win some of the swing states like Michigan, Wisconsin, Arizona and Pennsylvania (57 electoral college votes in total), whilst Florida and Texas remain too close to call (67 electoral college votes in total).
If the US Presidential election was not enough, markets will need to digest a barrage of economic data releases, such as the release of the October US jobs market figures on Wednesday and Friday, and the Federal Reserve’s latest monetary policy decision just after the election is concluded.
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