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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

November 2020 EVENTS - 29/10/2020

Micro Analysis

29 October, 2020

For General Information only. Not Intended to Provide Trading or Investment Advice. Your Capital is at Risk.

  • ISM Manufacturing PMI (Oct) (November 2 at 15:00 GMT)

September’s ISM Manufacturing PMI printed at 55.4, down from 56.0 in August. The consensus forecast for October is 54.9.

Possible Influence: Volatile US Dollar, Gold and US Stocks


Americans will go to the polls on November 3rd. They will be voting for President, their member of the House of Representatives, and possibly one of 34 Senators up for election. The consequences are monumental. A blue wave (Democratic sweep of the White House, House, and Senate) could usher in an unprecedented amount of fiscal stimulus over the next two years. It would also most likely bring about higher tax rates for corporations and the wealthy. A split government would probably result in more gridlock and less fiscal stimulus.

The entire Presidential election hinges on a handful of key states. The most important is Florida. President Trump has no path to victory without it. Other important states are Pennsylvania, Wisconsin, Arizona, Michigan, and North Carolina. Whichever candidate collectively wins those states will probably win the election.

President Trump is behind in the polls but many analysts believe there he has a lot of silent support that doesn’t get reported. His popularity has gained amongst Blacks and Latinos since 2016.

At the time of this writing President Trump is an underdog to win re-election. Joseph Biden’s probability of winning is currently 88%.

The biggest danger to the markets is election chaos. There is a chance the winner will not be known for a few days or even a couple of weeks. Markets do not like uncertainty. Most states will be dealing with a record number of mail-in ballots. With mail-in ballots comes legal challenges. Both sides are preparing to dispute results in states that are close. The Democratic party has already retained 600 lawyers. Expect most legal matters to ultimately end up before the U.S. Supreme Court, which now has a 6-3 conservative tilt.

Possible Influence: Volatile US Stocks and Indices, Global Stocks and Indices, Commodities, Currencies

  • Monetary Policy Meeting of the Reserve Bank of Australia (November 3 at 3:30 GMT)

In September the Board reaffirmed that it would not increase the cash rate target until progress is made towards full employment. However, the return of Covid to Australia and a partial shutdown in Victoria has harmed the economy and bank officials have hinted that interest rates are likely to be cut from the current rate of 0.25% to 0.10%

Possible Influence: Volatile AUD

  • Monetary Policy Meeting of the Bank of England (November 5 at 12:00 GMT)

In September the bank held rates at 0.10%, despite some statements from monetary policy committee members that the BoE is willing to consider negative interest rates at some point in future if necessary. Analysts believe this could happen in the event of a no deal Brexit, or another economic downturn. However, rates are likely to remain at their current rate this month.

Possible Influence: Volatile GBP

  • U.S. Fed Interest Rate Decision (November 5 at 19:00 GMT)

The Fed is expected to leave interest rates at 0.25%. While the American economy is recovering many sectors are still suffering, especially those related to travel and leisure. The Fed is expected to remain ultra-accommodative for several years.

Possible Influence: Volatile US Dollar, Gold and US Stocks

  • U.S. Unemployment Rate and Non-Farm Payrolls (NFP) (Oct) (November 6 at 13:30 GMT)

The Unemployment rate for September was 7.9%. The September report beat its forecast of 8.2%. The figure is expected to remain at 7.9% for October.

NFP for September added 661,000 jobs. Analysts had been expecting 850,000 new jobs. The forecast for October is an increase of 510,000 jobs.

Possible Influence: Volatile US Dollar, Gold and US Stocks

  • Inflation data in US (Oct) (November 12 at 13:30 GMT)

Core CPI (excluding food and energy) was 1.7% in September, slightly below the consensus forecast of 1.8%. The annual inflation rate for September was 1.4%, which was in line with expectations. In October the annual inflation rate is expected to rise to 1.5%.

Possible Influence: Volatile US Dollar, Gold and US Stocks

  • Retail Sales in US (Oct) (November 17 at 13:30 GMT)

Retail sales beat expectations coming in at 1.9% in September. It was only forecasted to rise 0.7%. All of the stimulus money in the U.S. economy, both fiscal and monetary, is having an effect on prices. No forecast for October yet.

Possible Influence: Volatile US Dollar, Gold and US Stocks

  • US EARNINGS SEASON (October 13 - November 27, 2020)

Third Quarter Earnings season continues into November. Most releases in October exceeded expectations. Investors will still be watching to see how well corporate earnings are recovering after the worst of the pandemic lockdowns are over. The other major factor that will have an effect on corporate earnings, from July to September, is the fiscal cliff that the U.S. economy went over at the end of July. The bulk of the enhanced unemployment benefits ended and many of the other special stimulus packages such as the Payroll Protection Program ran their course. So analysts will be watching how the lack of that government stimulus affects earnings.

Earnings releases in November include but are not limited to Paypal, Berkshire Hathaway, Disney, Nvidia, Walmart and McDonalds.

Possible Influence: US Stocks and Indices

  • The 180th OPEC+ meeting (November 30 - December 1st)

A full OPEC and Non OPEC meeting will take place from November 30th to December 1st. Bearing in mind the sharp new wave of Covid and associated lockdowns and their negative impact on oil demand, members will have to come to a decision on oil supply.

The current deal has seen OPEC and Non OPEC production cut by 7.7 million bpd, but envisages that this will be relaxed to 5.8 million from January 2021 to April 2022. However, earlier this month Saudi Arabia was said to be considering cancelling the planned relaxation and President Putin recently stated Russia’s position could change and the existing production cut could be extended if necessary.

Possible Influence: Volatile Brent and Crude Oil prices

  • Brexit: EU UK trade negotiations (Ongoing - Mid November)

EU UK trade negotiations are entering their final phase with the parties approaching the mid November deadline. There have been reports of advancement on one of the main sticking points of fishing but progress remains slow. If no compromise is reached the UK is expected to leave the EU without a deal. It remains more likely that a deal will be reached between the two sides, but the question is whether it is a more comprehensive deal or a “bare bones” free trade deal that leaves out major issues of dispute.

Possible Influence: Volatile on GBP and EUR expected

  • New Wave of COVID-19 (November)

As winter beckons, a sharp increase in the number of Coronavirus Infections particularly in Europe and in other parts of the world and associated restrictions has reminded investors that the world is facing another wave of Covid and more damage to the global economy. Analysts believe that most countries do not want to implement “hard” national lockdowns due to the heavy economic (and political) damage to their countries. However, “soft” lockdowns that may include closures of businesses and localized lockdowns are likely to make a negative impact.

FRANCE: On October 28th Prime Minister Macron announced a hard lockdown with people being required to remain at home, although those who are unable to work from home will be allowed to travel to work and back. GERMANY: On October 28st Chancellor Merkel announced new measures increasing restrictions including the closure of bars and restaurants and strict control of those entering shops. UK: The UK continues to see increased Covid cases that caused a number of local lockdowns in the North of England and increased restrictions throughout the country including the early closure of businesses in the service industry. Prime Minister Johnson is under pressure to increase measures further. US: The US has seen numbers jump beyond 8.8 million cases and over 227,000 casualties, and the rate of infections are rising as the US grapples with a new wave of Covid. Record numbers of infection in the US suggest that the lifting of existing measures will be delayed and new ones implemented. RUSSIA: Russia continues to be hit hard by Covid after the country and although the authorities have said they will not impose harsh measures, hospitalisations are at 90% and some form of soft lockdown may be inevitable.

Markets are looking forward to positive news from vaccine producing drugs companies with AstraZeneca, Moderna and Pfizer thought to be leading the race with Johnson and Johnson also in the running. Most hope to produce a vaccine by the end of the year and want to roll their vaccine out to the public in the first half of next year.

Possible Influence: The US dollar could be expected to experience high volatility along with the Euro, the Australian dollar and the Japanese yen. Global stocks, including those of the US, and oil prices could be expected to remain under pressure. Gold is also expected to rise in volatility.

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