Markets opened this Monday morning in a risk off mood with US and European futures opening to the downside due to surging corona virus cases in Europe and software giant SAP issuing a profit warning. The second wave proves to be worse than the first. DAX traded around 2.3% lower, FTSE dropped around 0.5%, both S&P and NASDAQ are trading around 1% lower at the European open. Concerns about virus also hit the oil price with US Crude 2.7% lower. Gold is off 0.3% at $1,899.

With only a couple of weeks remaining before US presidential elections, we expect markets to stay in “wait-and-see” mode this week. Major events data wise this week are ECB rate announcement, and Third Quarter Advance GDP from US due on Thursday. Eurozone is expected to release third quarter GDP on Friday.

European equities were down 1.4% last week with concerns over the rise in virus cases across the region as well as the absence of a U.S. fiscal stimulus deal. Growing bets of a win for Democrat Joe Biden in the Nov. 3 U.S. election have spurred a rotation into cyclicals and out of defensive equities as the new administration is expected to accelerate economic support measures.

Brexit negotiations are set to continue this week with UK and EU making some progress on competition guarantees, including state aid rules. However, fishing remains a key sticking point. Rising cases in the UK and continued Brexit uncertainty weighted on British pound, which trading around 1.30.

U.S. stocks turned lower, with Intel Inc.’s poor results dragging on technology shares and lawmakers in Washington still without a deal on spending aid on Friday. Treasuries rose. Intel Inc. plunged more than 10%, dragging chipmakers lower. The 10-year Treasury yield slipped to 0.83%. Investors are losing faith that Washington lawmakers will deliver a financial spending bill to prop up the economy before the Nov. 3, though optimism that a deal will come at some point this year has helped drive Treasury rates higher in recent days. Concerns remain that rising virus cases will force additional business closures. The final presidential debate appeared to do little to alter the trajectory of a race that Democrat Joe Biden leads according to polls.

Russia: maturities across the Russia government Eurobonds yield curve were little changed in Friday afternoon trading. The central bank held the key rate at 4.25% as expected, but left the door open for more easing. The ruble trimmed its earlier gains, while Russia’s local bond yields were little changed. The U.S. election, and a possible win by Joe Biden, has been weighing on the ruble and is an unspoken reason for caution.

SSA: Having closed out on a positive note with RM cash being added across HY, risk is off this week. Tensions continued in Ivory Coast and Nigeria over the weekend with bloody clashes ahead of the elections in Ivory Coast and protests in Nigeria turning into looting. Both countries opened 0.5% lower.

Latam: Two of Argentina’s largest creditor groups excoriated the government for mismanaging the economy, saying the country was headed for disaster just seven weeks after restructuring $65 billion in debt. The investors urged policy makers and the International Monetary Fund to do their part to set the stage for an economic recovery. They said in a joint statement that the government’s foreign-exchange policy was curbing exports and making it difficult to build foreign reserves.