DBEU

The dollar is consolidating yesterday's losses.Equities are lower, and benchmark yields are little changed.The S&P 500 is trading a little lower following yesterday's 0.2% decline.Gold rose almost 1% yesterday, the most in a couple of weeks, on the back of the weaker dollar.WTI for December delivery slumped 4% yesterday and slipped below the $40-mark and straddled today.

The dollar is falling against most of the world's currencies today.Sterling and the Norwegian krone are leading the majors higher.The Chinese yuan extended its gains and is now at the best level since July 2018.In Asia, most of the large markets gained, but China, India, and a handful of smaller bourses were sold.Europe's Dow Jones Stoxx 600 is off for the third day and the sixth session in the past seven.

China's economy expanded by 2.7% in Q3, a little below the Bloomberg survey median forecast of 3.3%, and Q2 growth was revised to 11.7% from 11.5%.The UK has been struck by a resurging virus, the lack of progress with EU trade talks, and the pre-weekend downgrade by Moody's.In an otherwise light calendar today, six Fed officials speak. These include Chair Powell at an IMF-sponsored discussion of cross-border payments and Vice-Chair Clarida on the economic outlook.Oil prices have recovered from their April lows but have been moving broadly sideways for three-four months.

The central banks have increased their assets by 38.5% in the last twelve months, which has had a profound effect on both the bond and equity markets globally.They have pushed down interest rates for their nations, in an attempt to control the debt of their respective governments, as all of the governments borrowed more and more money to support their economies during the pandemic.The ECB and the BOJ have pushed their yields below the once-unthinkable line of zero. The Fed may also be motivated into negative interest rates if the Democrats win the upcoming US elections.

Could new COVID-19 lockdowns in Europe threaten the region's recovery?Potential U.S. election outcomes and impacts.Behind the September U.S. retail sales report.

The firm close in US equities failed to carry over much to Asia-Pacific trading earlier today. Only Hong Kong and Indian equities gained.The tragic resurgence of the virus is likely to resolve the apparent debate at the ECB.Three successive gap-higher openings are a sign of an over-extended market.

U.S. equity markets have been in a holding pattern since early September, but we’ll likely see a relief rally following the election.Yield curve control will make the environment very hard to price and the safety valve for the inflation play will be precious metals.Europe’s approach to stimulus has delayed insolvency for many companies and continues supporting jobs that may never be coming back, which is having a zombification effect.

Led by a 2% drop in Hong Kong, Asia-Pacific equities tumbled, with the exception of Australia.The Dow Jones Stoxx 600 is off for a third day, but the nearly 2.2% decline is the largest drop since September 21.US shares are also lower.The dollar is gaining across the board.The Antipodeans and Scandis are the weakest. Even the yen is softer.