Here’s what you need to know on Monday August 31
Investors are encouraging new hopes for an upcoming coronavirus vaccine and optimistic Chinese PMIs. Eurozone CPI figures and month-end flows should move the markets.
Coronavirus vaccine hopes: Stephen Hahn, head of the U.S. Food and Drug Administration, said he was ready to speed up vaccine approval if the benefits outweigh the risks. China has approved the Sinovac COVID-19 vaccine candidate for emergency use, starting with high-risk groups.
Chinese purchasing managers index for August came out above 50, indicating an expansion. PMI Services beat estimates with 55.2 points, showing consumers are catching up as life in the world’s second largest economy returns to normal overall.
Japanese stocks are growing, recovering after Warren Buffet’s Berkshire Hathaway announced an investment in local businesses. In addition, the Japanese press reports that economic policy is likely to stay on track after Prime Minister Shinzo Abe resigns. The yen, a safe haven, gives birth to its gains.
China may block the sale of TIC Tac to an American company, potentially adding to Sino-American tensions. The short video app is viewed as a security threat by Washington, and Beijing is reportedly concerned about the export of artificial intelligence technologies.
Overall, Asian markets are on the rise and S&P 500 futures are pointing to new highs. Gold is also rising.
EUR / USD is trading around 1.19, holding the gains. The surge in French coronavirus cases – joining the worrying situation in Spain – weighs somewhat on the euro. Preliminary eurozone inflation figures for August are due on Monday.
GBP / USD is trading above 1.33 but off highs. The UK government is considering £ 30 billion in tax hikes to fill a gap in the deficit and anger within the Conservative Party. Brexit talks remain deadlocked and UK chief negotiator David Frost has said Britain is ready to drop the negotiations.
Richard clarida, Vice Chairman of the Federal Reserve, will speak later today. He can comment on the Fed’s change to allow inflation to overheat, a move that pushed the dollar lower last week.
Oil price stand on higher ground in the aftermath of Hurricane Laura. Facilities are gradually opening up in the Gulf of Mexico.
Cryptocurrencies had a positive weekend, with Bitcoin exceeding $ 11,600 and Eterheum exceeding $ 400. Digital coins decline slightly on Monday.
End of month flow can trigger volatility, especially in the US session. A public holiday in the UK means a drop in trading volume during the European morning.
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