Global equities closed on a weak note following news that President Trump had tested positive for COVID-19.

UK

The FTSE 100 increased 1.0% over the week.

The European Commission announced legal action against the UK following the controversial internal markets bill. Brexit talks between the two sides are entering a critical stage in a last-ditch effort to overcome stubborn disagreements on fishing rights and state aid.

US

The S&P 500 rose 1.2% over the week. In September, the index posted its first monthly loss since March’s sharp sell-off while the tech heavy Nasdaq fell even more.

It was a bad week for President Trump. After the New York Times revealed that the president had paid only $750 in taxes in 2016 and 2017, and no taxes at all for the prior decade, the first of several planned debates with Democratic contender Joe Biden was generally viewed to be farcical, being marred by constant interruptions from the president. Two days later Trump tested positive for COVID-19.

The US economy added 661,000 jobs in September, below the 850,000 that economists had expected. The unemployment rate fell to 7.9%. The US economy has now recouped around a half of the 22.2 million positions it shed between February and April.

US personal income fell 2.7% in August after emergency unemployment benefits ended for millions of claimants.

Europe

The FTSEurofirst 300 gained 1.8% over the week.

ECB president Christine Lagarde said the European Central Bank will consider letting inflation rise above the bank’s official target. This follows a similar move by the US Federal Reserve.

The eurozone recorded its second consecutive month of deflation, with headline consumer prices falling to a four-year low of -0.3% in September. Core inflation hit a record low of 0.2%, down from -0.4% in August.

Japan

The Nikkei 225 slid 0.8% over the week.

The Bank of Japan’s Tankan survey of business sentiment rose by 7 points to -27 in the third quarter, suggesting Japanese companies are still struggling to recover from the COVID crisis.

Pacific Basin

IPOs in South Korea are on track for the biggest year since 2017. So far this year, 67 companies worth $2.4 billion have listed, with Big Hit Entertainment due to further increase the total when it lists in October.

Emerging Markets

Polish e-commerce company Allegro is set for the country’s biggest-ever stock market debut.

Bonds

The yield on the 10-year US Treasury bond closed the week at 0.69%, while the 10-year German Bund yield ended at -0.54%.

Currencies

The Chinese renminbi recorded its best quarter since the 2008 financial crisis between June and September, helped by a weaker tone to the US dollar. Attractively priced bonds – 10-year Chinese debt is trading on a yield of just above 3% – have further boosted the currency.

Commodities

Brent crude slipped back below $40 a barrel.

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