The upcoming US presidential election is contributing to market volatility and raising fears of a disputed election result, which could lead to market instability.
Attention shifted in September from monetary policy to fiscal policy as markets looked for signs that fiscal spending will continue to prop up economies around the world.
The Australian federal budget delivered in October was heavily focused on supporting employment and incomes, producing a $214 billion deficit for 2020-21.
Fears of a new wave of infections have gripped Europe, with France’s daily cases reaching an all-time high of nearly 19,000 in early October.
Data from the World Health Organisation showed confirmed cases worldwide were above 33 million at the end of September and rising. The global recovery is taking hold as economies gradually emerge from lockdown, however significant uncertainty remains about the possible path the pandemic could take and the timeline for vaccines to be made available to the public.
Recent data suggests the US recovery lost some steam in September with key releases falling short of expectations. Nonfarm payrolls disappointed, with 661,000 jobs added, well short of the consensus 859,000.
Most EU member economies remain under pressure from COVID-19 containment measures as governments fear a new wave of infections could forestall the recovery.
China has largely contained the COVID-19 virus with just over 91,000 confirmed cases and an official death toll of 4,700 at the time of writing. China’s recovery is well under way, although consumers remain cautious and there is still potential for further outbreaks.
Japan’s incoming prime minister Suga Yoshihide will lead the economic recovery following the resignation of Shinzo Abe.
The federal budget has allayed fears that fiscal policy will be doing too little lifting in the face of the pandemic, with a singular focus on supporting incomes and employment. On the spending side, the government has put in place significant stimulatory measures, including $120 billion over 2019-20 and 2020-21, primarily for the JobKeeper payment.