Trump's COVID Diagnosis Leaves Markets Unsettled

US equity futures are sharply lower, with the e-mini S&P off well over 30 points following the confirmation of President Trump's COVID diagnosis. The implications for the November Presidential election remain unclear, with the viability of the next two Presidential debates also being called into question.

The resolutely risk-off tone has resulted in JPY outperforming in FX space. USD/JPY initially fell through Y105, but has since recovered slightly ahead of NY hours.

GBP also outperforms on renewed Brexit trade talk optimism. The scheduled press conference between EU's Barnier and UK's Frost has been cancelled, but markets have taken a positive view of newly planned talks between PM Johnson and EU's Von der Leyen on Saturday. Reports of another round of EU/UK trade talks in mid-October have also proved supportive. GBP/USD trades within range of yesterday's high at 1.2978.

EUR trades poorly, falling against most others in G10, with the lowest CPI estimate since 2016 adding some pressure to the single currency. CPI estimate fell to -0.3% vs. Exp. -0.2%.

September's Nonfarm Payrolls report takes focus going forward, with the US expected to have added 875k jobs across the month, prompting a further 0.2ppt decline in the unemployment rate. Speeches from ECB's de Guindos & de Cos and Fed's Harker and Kashkari are also due.