Today the European Council is in the second and final day of its meeting. Though EU member states are still busy discussing many pressing issues, including the severe coronavirus outbreaks across the bloc, they have already come forward with more information about Brexit.
According to the latest reports, the EU wants to continue negotiating for two or three extra weeks. The union previously said that a trade deal needs to be ready before the end of October to allow enough time for all member states and the UK to legislate it. An extra week will likely not be too problematic, unless UK Prime Minister Boris Johnson fulfills his promise to end the talks this week.
In other political news, last night Joe Biden and Donald Trump held separate events instead of their second debate. Trump’s town hall was more or less unremarkable, with the incumbent President refusing to talk about specific policies. Joe Biden, meanwhile, promised to tax America’s richest more heavily to raise funds for public spending.
Based on the latest polls, Biden has a 10-11 point lead before Trump, an advantage that he has maintained in the weeks leading up to the election. The markets are increasingly preparing for a Biden win, but one needs to recall that due to the electoral college system in the United States, polls (which largely measure the popular vote) may be a poor predictor of the actual results.
As for fundamental reports, today it became clear that Italy’s inflation rate is dropping, which is a common theme for the EU at the moment. At least the eurozone core inflation was in line with the forecasts at 0.2%, but the trade balance was worse than expected.
In the United States retail sales surprisingly increased in September. This report comes on the back of yesterday’s employment data, which showed that initial jobless claims increased last week instead of going down, with the 4-week jobless average report higher than anticipated.
