Global shares and oil hammered after Trump tests positive for COVID-19, sparking safe-haven rush
- US stock futures tumbled 2% early Friday after President Donald
Trumptested positive for COVID-19, while volatility spiked ahead of a key employment report. Goldand US Treasurys rallied as investors sought stability in safe-haven assets, while oiland cryptocurrenciesdropped sharply.
- "The initial negative market reaction market implies that volatility will remain elevated as a result," ADM Investor Services chief global economist Marc Ostwald said.
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"News of Trump's testing positive for Covid-19 test throws a spanner in the pre-election process, as it clearly limits his ability to campaign for the presidency, and the initial negative market reaction market implies that volatility will remain elevated as a result," ADM Investor Services chief global economist Marc Ostwald said.Read More: BlackRock's investment chief breaks down why Congress passing a second round of fiscal stimulus is 'quite serious' for markets and the economy — and pinpoints which sectors will benefit in either scenario
The economy is expected to have added 850,000 workers to US non-farm payrolls in September, down from August's 1.371 million rise. This would be the first gain below 1 million since the labor market began to recover in May this year.
Meanwhile, various indicators of volatility - a measure of investor nervousness - rose sharply. The VIX index, which reflects options volatility on the S&P 500, rose by almost 9% in early US trading, while the V-DAX New - an indicator of options volatility on Frankfurt's DAX index - was up almost 7%."It seems that the knee-jerk reaction was first to sell USD a little instead, at least until markets can work out exactly how this potentially plays out. Stock futures are certainly going down at time of writing, however. Risk is off there," Rabobank strategists said in a note.
Spot gold was last up 0.1% on the day at $1,908 an ounce, having bounced off an earlier low of $1,889.90 an ounce as the news of Trump's positive test broke. The yield on the 10-year US Treasury fell 1 basis point on the day to 0.664%.
Oil, one of the most sensitive
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