Overnight news that Johnson & Johnson is stopping its Covid-19 vaccine trial has put a (small) dent in stock markets today, although the Nasdaq may be proving that traders from Robin Hood and one or two big institutional options players (the ‘whale’) are ruling the tech waves. Markets are inclined to a take a glass half-full approach to both Biden’s increasing lead in the polls and hopes of US fiscal stimulus after yesterday’s strong rally.

Third quarter earnings for banks kicked off today in a similarly robust way with BlackRock beating earnings estimates and assets under management surging to a record, while JP Morgan climbed after revenues topped expectations bolstered by slimmer loan loss provisions and a trading boom. It also gave an upbeat outlook for the US economy.

In contrast to earlier overnight positive data which showed a recovery in overseas orders for Chinese exporters, the UK’s job losses rose at a record rate in the three months to August, while the number of people claiming jobless benefits climbed to more than double its pre-Covid level. Sterling is the weakest major on the day, but Brexit is taking centre stage this week with markets seemingly expecting PM Johnson not to pull out of talks on Thursday as the UK and EU will agree to extend talks into November.

EU officials calling Johnson’s bluff?

The game of Brexit chicken really ramps up this week, along with (probably) record headline havoc! Competing voices from both sides are hitting the wires every hour as discussions resume in Brussels. To say we’ve reached a critical phase is an understatement and hardly anything else looks likely to impact GBP, though this morning’s jobs data and comments about negative interest rates have hardly helped.

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The upward channel in cable still looks intact even though the 50-day Moving Average at 1.3028 has acted as resistance today. A strong close is needed above here to push prices higher through yesterday’s high at 1.3083. That level represents the 50% retracement of its September drop so this area could be a key pivot with no obvious resistance between 1.31 and 1.32.

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