Market Watch review. 02.11.2020

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

• USD continues to grow. 
• ECB ready to soften monetary policy. 
• The negotiations between the EU and Britain. 
• Oil anti-record since May of this year. 

Today, since the opening of the markets, demand for USD has remained relatively stable, which is mostly due to the uncertainty associated with the upcoming US elections. Despite Joe Biden's lead in national opinion polls, the fight is almost even. Moreover, the degree of tension in the United States continues to increase, so I don’t exclude the appearance of mass protests and clashes on the streets of major American cities.

I will pay attention to the EUR/USD currency pair, which has already collapsed to 1.1620, but the activity of sellers has significantly decreased, as Europe published the final data on the change in the index of business activity in the industry. The actual data turned out to be better than the previous values, thus providing short-term support, but the risk of further weakening of the pair remains elevated.

In addition, the head of the ECB contributes to this by all means, using verbal interventions. Christine Lagarde hinted that a new monetary stimulus is just around the corner – a bearish fundamental factor for the EUR. The markets ignored this statement and focused on coronavirus pandemic and elections in the United States. Therefore, the head of the RBA also focused on the comments of Christine Lagarde, adding that policy easing is likely to occur in December. 

Another very important event for the market is the negotiations on a trade deal between the EU and Britain. Reaching a compromise can provide very strong support for the GBP and, as a result, the GBP/USD currency pair. Let me remind you that the breakdown of negotiations was one of the key bearish fundamental factors for the GBP.

Now let's move on to commodity assets. Today, the price of US WTI crude oil fell below $34 per barrel, thereby setting an anti-record since May of this year. The pandemic continues to put pressure on oil prices. Let me remind you that about 100 thousand people get sick every day in the United States, while a significant part of European countries is already in quarantine, thereby increasing the risk of a significant decrease in physical demand for black gold.

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