Dual-Dip Recession on Track for UK Economy, Wide Divergence on Brexit and EU, US Elections

In October, the UK services PMI stood at 51.4, sharply below the September level of 56.1. The Composite PMI finished at 52.1, up from 56.5. This is also the lowest level in four months.

Tim Moore, Economics Director at IHS Markit:

“October data indicates that the UK service sector was close to stalling even before the announcement of lockdown 2 in England… November’s lockdown in England and a worsening COVID-19 situation across the rest of Europe means that the UK economy seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021.”

Britain’s chief Brexit negotiator David Frost confirmed Wednesday that significant differences remain on some key issues with the European Union in Brexit negotiations.

“We’ve just finished two weeks of intensive talks with the EU,” Frost tweeted out. “Progress made but I agree with Michel Barnier that wide divergences remain on some core issues. We continue to work to find solutions that fully respect UK sovereignty.”

The GBP/USD pair showed no immediate reaction to these comments and most recently lost 0.43% on the day to 1.3003.
United States Election Outcomes
There has been a lot of volatility in the financial markets over the past 24 hours as traders pre-traded US election results. At the time of writing, the race between Donald Trump and Joe Biden was very intense, which was completely different from the picture portrayed by most mainstream media.

The general picture in the forex market is very ambiguous: the dollar and the yen are the strongest for today, but the weakest is for the weak. Today commodity currencies are the weakest, but the weakest have the strongest. It takes more time to get a clear answer about who will be the next US president and in which direction the markets will move.

The US is struggling to determine who will be the next president. According to AP, Joe Biden secured 248 electors, while US President Donald Trump had 214. A 270-man majority is needed to win.

However, Trump is legally challenging three states: Wisconsin, when he asked for a count, Michigan to stop counting ballots, and finally Pennsylvania, where counting could take after Friday.