Key Points:

USD continues recent rebound

US CDC asking states to prepare for vaccine distribution

Flow driven US stocks continue to move higher

An odd trading day that saw a breakdown in recent correlation between assets with a disappointing ADP report the backdrop. The USD continued to strengthen with DXY pushing back up to 92.85 gaining ground against AUD, EUR and GBP once again in a similar pattern to the previous trading day. However the NZD and CAD remained well supported a surprise for the latter with the Oil price closing down 2.7%. Gold slipped further after trying to rally back through 1970/75 the pair failed and dropped back to 1932 down 1.4% into the close with Silver faring worse at 2.4% down and BTC once again capped around 12000 falling back to 11300. The Australian GDP print of -7% was the biggest fall in almost 30 years and weighed on the AUD pushing back to 0.7300 during the US session but has bounced well with a stronger US stock market into the close. The EUR also remained under pressure and fell back further to 1.1822 having touched 1.20 the previous day, likewise Cable followed a similar move lower. US stocks continued the usual grind higher with once again new all time highs for S&P and Nasdaq but a stellar 450 pip gain on the Dow allowed it to record its best day in a week. Tesla slumped 10% at one point but made back 4% of that during the course of the day giving the Nasdaq a roller coaster ride. As mentioned prior the August ADP report came in at 428K new jobs less than half of the expected 1 million expected, however a revision up to July’s number by 50K was a positive. Overall the data was ignored as market consensus is that the ADP and NFP reports are apart from each other when predicting the current jobs market. Friday’s NFP print is expected to show 1.35 million job gains for August. On a political front the US Centers for Disease Control has asked states to prepare to distribute a coronavirus vaccine by November 1. Just in time for the election. Perfect timing one would suggest. Nevertheless the headlines were another reason for the stock market rally. In Asia today we see Australian Trade Data followed by Chinese Caixin PMI. The European session will show further PMI data from UK and Europe ahead of US weekly jobless claims data and ISM Services PMI.