The Opening Belle 14th October 2020

Asian equities slipped on Wednesday as halted COVID-19 vaccine trials and an impasse in U.S. fiscal aid package talks soured risk appetite, while the greenback held on to gains as demand firmed for safe-harbour assets.  

McConnell said the full Senate’s first order of business when it returns on Monday would be to vote on a $500 billion relief bill. It would include more money for the Paycheck Protection Program, which has helped small businesses pay employees during the pandemic.

McConnell said the bill would include help for schools and liability protections for businesses, which Republicans sought. McConnell also said there would be more unemployment benefits and assistance for hospitals in the bill.

“I want to give our friends on the other side one more chance to do highly targeted relief that the country desperately needs,” McConnell said in Barbourville, Kentucky.

But Senate Democrats blocked a similar proposal last month. Democrats have repeatedly rejected targeted aid proposals, preferring to do comprehensive bills that also include large sums of money for state and local governments whose budgets have been slammed by the pandemic.

 When even *CNN* and *Wolf Blitzer* are grilling Nancy Pelosi on why Democrats continue to reject any and all Republican stimulus offers, you know Dems might be playing politics. Watch as Pelosi snaps after failing to answer a basic question about why they won't compromise. pic.twitter.com/Nt2hagv2Us— Curtis Houck (@CurtisHouck) October 13, 2020 

 Who is more to blame for the failure to agree on a stimulus bill?

Nancy Pelosi 43%

President Trump 40%@YouGovAmerica/@YahooNews, RV, 10/9-11https://t.co/gIBzjtX1z9— Political Polls (@Politics_Polls) October 13, 2020 

This is an extraordinary result. The Index has now lifted by 32% over the last two months to the highest level since July 2018.

The Index is now 10% above the average level in the six months prior to the pandemic.

Such a development must be attributable to the response to the October Federal Budget; ongoing success across the nation in containing the COVID-19 outbreak; and the expectation that the Reserve Bank Board is likely to further cut interest rates at its next meeting on November 3.

Since 2010 we have conducted a post Budget question in the survey to assess the response of households to the Budget announcement.

Over that period, the net balance of respondents who assessed that the Budget would ‘improve their finances’ was –29%, a clear majority expecting measures to adversely affect their finances. We have never seen a Budget response that showed a net positive balance – until now. For this Budget we saw a net positive balance of 9.5% indicating that a clear majority of respondents assessed that the Budget would ’improve their finances’.

The Budget and the outlook for interest rates have given a clear boost to the confidence of homeowners.

Respondents with a mortgage saw their confidence lift by 12.7% while

those who fully own their homes lifted by 13.5%.

Government sources said the Prime Minister could order a two-week closure of pubs, restaurants and some other businesses if measures brought in on Wednesday in Covid hotspots do not reverse the spread of the virus.

A decision will be taken toward the end of next week, ahead of the half-term holiday for state schools which begins on Oct 26 and would mark the start of any temporary lockdown.

One option under consideration is for regional circuit breakers, which might be preferred by the Prime Minister after he likened a second national lockdown to a “nuclear deterrent”. One senior source said the chances of a circuit breaker were “at least 80 per cent”.