Key Points:

Trump cancels stimulus talks with Democrats causing chaos

Markets slump as risk aversion takes over

Biden gap over Trump highest since campaign began

Trump arrived back in to the White House and continued to cause chaos with some analysts concerned about his mental health and the effect of the steroids given some rash decision making in the last 24 hours. Firstly he told the world that the virus is nothing to be worried about whilst removing his mask on the steps of the White House and later in the day decided to cancel all stimulus talks until after the election with the Democrats in what looked like a dummy spit. Markets didn’t like the latter and risk got hit hard with all US indices plunging lower after being somewhat buoyant for most of what was a quiet and sanguine day. The USD rallied pushing the DXY from 93.45 to 93.85 and precious metals fell with Gold hovering around 1912 prior dumping to 1875 after the announcement, closing down $33 on the day. The commodity currencies were already on the back foot yesterday with the AUD under pressure post RBA, having touched the 50DMA at 0.7210 the pair has fallen back to 0.7095 as markets digest the stimulus news and a slightly dovish tone from the RBA hinting that further monetary and fiscal stimulus is likely to be required for some time. Ironically, prior to Trump’s bombshell, the Fed’s Powell had been on the wires reiterating the need for fiscal stimulus and since the announcement several Republicans have voiced their concerns over their re-election chances without an agreement. Of course, this being Trump it’s highly likely that we may get an about turn as he so often does. EUR moved above 1.1800 on better German factory orders and GBP touched above 1.30 briefly but fell back as Brexit comments weighed, however there is talk that the EU are more positive about a deal than they have been for a long time. Talks continue before the deadline next Thursday. From here it would seem that markets will be cautious with a risk aversion bias which should favour USD buying for now, however any headlines can swing things quickly. Nothing of note due in Asia today with ECB’s Lagarde speaking tonight ahead of the FOMC minutes. China returns from the National Day celebrations.