NEW YORK, Oct 6 (Reuters)Foreign exchange markets are growing less fearful about the outcome of next month’s U.S. presidential election, judging by the fall in longer-dated implied volatility on options, the main measure of how much risk is perceived.

Currency options investors are increasingly betting that Democratic challenger Joe Biden will conclusively defeat President Donald Trump, given his lead in prediction markets and national polls.

This can be seen in the fall of some prices for implied volatility, which measures how much the options market believes spot exchange rates will move over a given period and is distinct from actual or realized volatility.

Biden opened his widest lead in a month in the U.S. presidential race after Trump’s positive coronavirus test as a majority of Americans believed he could have avoided infection if he had taken the virus more seriously, the latest Reuters/Ipsos poll showed.

Options are widely used to hedge against expected moves ahead of a major event. “Vol” is a key input in the price of an option and can vary for an instrument depending on supply and demand for options and time to maturity. The higher the volatility, the greater the uncertainty over a given term.

Options strategists pointed to flatter implied volatility curves for most currency pairs and said longer-dated volatility, three months and onwards, traded lower than the shorter-dated vols.

This suggested that investors are expecting less chaos and a calmer market weeks after the Nov. 3 election. The three-month volatility extends until December and any view or expectation of turmoil will be reflected in the options pricing for this period.

“The market is assuming that there is a higher probability of a Biden presidency and that there won’t be as much uncertainty after the election as the market was previously thinking,”

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SYDNEY (Reuters) – A measure of Australian business conditions rose in September to levels not seen since the coronavirus pandemic forced a nationwide lockdown, though overall levels were still the below long-run average, survey results showed on Monday.



a group of people walking down the street: Shoppers walk along a street in the central business district of Sydney


© Reuters/DAVID GRAY
Shoppers walk along a street in the central business district of Sydney


National Australia Bank’s index of business conditions rose 6 points to 0 from -6 in August.

The index has come a long way since hitting a trough of -34 in April at the height of the pandemic though it is still nowhere close to the long-run average of +6.

The survey’s measure of business confidence picked up too, but stayed in negative territory, climbing to -4 from -8 in August.

The improvement in conditions was driven by a rise in all three sub-components with trading and profitability in positive territory, likely reflecting improving activity as the economy opens up.

The employment index stayed negative, suggesting businesses were not yet ready to add new positions.

Forward orders rose to -7 while capacity utilisation edged up to 76.9%. This, in addition to still negative confidence, has seen capex stay in negative territory, NAB noted.

(Reporting by Swati Pandey; Editing by Sam Holmes)

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The numbers: Consumer confidence rose in September to the highest level since the coronavirus pandemic began after the number of cases declined and the economic forged ahead, a closely followed survey showed.

The index of consumer confidence rose to 101.8 this month from 86.3 in August, the Conference Board said Tuesday. It was the biggest one-month increase in 17 years.

Economists polled by MarketWatch had forecast a smaller increase in the index to 89.6. The level of confidence in August was also revised slightly higher after initially showing the lowest reading since the pandemic began more than six months ago.

“A more favorable view of current business and labor market conditions, coupled with renewed optimism about the short-term outlook, helped spur this month’s rebound in confidence,” said Lynn Franco, senior director of economic indicators at the board.

See:MarketWatch Coronavirus Recovery Tracker

What happened: An index that gauges how consumers feel about the economy right now jumped to 98.5 in September from 85.8 in the prior month.

Another gauge that assesses how Americans view the next six months—the so-called future expectations index—surged to 104 from 86.6.

The rebound in confidence almost certainly reflects a decline in coronavirus cases after a midsummer spike.

Perhaps more surprising, a reduction in federal benefits for the unemployed did little to dampen the optimism. A $600 federal unemployment stipend expired at the end of July. President Trump authorized temporary $300 payments, but the money is already running out and Congress is deadlocked on what to do next.

Big picture: The springback in consumer confidence after two straight declines is welcome news, suggesting a U.S. recovery is still on track even if growth has tapered off since the late spring. Although millions of Americans remain out of work, more people are returning to their jobs and

Updated


WASHINGTON (AP) — U.S. consumer confidence rebounded more quickly in September than most economists had expected though they remain far from levels that were the norm before the pandemic struck.

The Conference Board reported Tuesday that its consumer confidence index rose sharply to a reading of 101.8, up from 86.3 in August, largely due to a more favorable view on current business and labor market conditions.