The Opening Belle

A gauge of Asian shares climbed to a one-month high on Thursday, as renewed hopes for more U.S. stimulus helped restore investor confidence with markets now pricing in a Democratic victory during elections in November.

 European Opening Calls:#FTSE 5952 +0.10%#DAX 12973 +0.35%#CAC 4898 +0.33%#AEX 557 +0.46%#MIB 19503 +0.35%#IBEX 6947 +0.54%#OMX 1848 +0.46%#STOXX 3246 +0.39%#IGOpeningCall— IGSquawk (@IGSquawk) October 8, 2020 

 A MESSAGE FROM THE PRESIDENT! pic.twitter.com/uhLIcknAjT— Donald J. Trump (@realDonaldTrump) October 7, 2020 

The German EU presidency has dangled the possibility of extra billions of euros in the bloc’s upcoming seven-year budget in a bid to break an impasse with the European Parliament over proposals to link payments of EU money to rule-of-law principles.

Michael Clauss, Germany’s ambassador to the EU, on Wednesday wrote to MEPs handling the budget negotiations, warning that time was of the essence if the EU’s planned recovery fund and budget programmes were to start at the beginning of next year.

Proposals agreed at the July EU summit to curb funding to countries deemed to be in breach of EU laws and values have triggered a split both between member states and with the European Parliament. Northern European countries and MEPs want the plan pitched by the German EU rotating presidency made tougher, while central European states such as Hungary say it is already too strict.

Mr Clauss, however, repeated that the mechanism would only kick in if breaches of the EU’s rule-of-law regime directly affected the sound management of the EU budget. The position stands firm against MEPs who want sanctions to kick in over contentious judicial reforms or clampdowns on free speech that have taken place in Hungary and Poland.

The gambit from the German presidency is also likely to encounter resistance from richer “frugal” governments who have said they will not pay more into the budget and who have also rejected the presidency’s rule-of-law proposal.

One frugal diplomat said the letter “proved once again that the EU’s values are for sale”.

A senior EU official said after the call that Brussels was still unclear if the U.K. is willing to budge on key EU red lines, namely the so-called level playing field or governance of any agreement.

“In fact, our main message, you know we see signs that things are moving forward on a couple of things, but the main things still remain unresolved,” the official said. “And that’s why we are saying show your cards on the table. On the most difficult topics, which are essential to getting access to the single market, which they desperately want, we don’t see any signs of progress yet and that is at the heart of the discussion.”

The EU continues to have concerns about a range of issues, in particular that the U.K.'s post-Brexit subsidy regime could undermine the European single market's "level playing field."