LONDON – 1/COVID THROWS US ELECTION CURVEBALL

Donald Trump has joined the list of world leaders who fell prey to the coronavirus after shrugging off risks, scorning masks and making public appearances without following distancing guidelines. But a U.S. president testing positive, four weeks before elections, will cause far more ructions than the recent illnesses of the Brazilian or British leaders.

His quarantine period, as campaigning enters its final stretch, could help Democratic challenger Joe Biden cement his sizeable poll lead. But the possibility of Trump being hospitalised, any cabinet members falling ill, or calls to postpone elections will mean a major setback for stock markets.

A rush to hedge such risks is lifting gold prices as well as equity and currency volatility. In reality, all bets are off — even Betfair has suspended punts on the election outcome.

(Graphic: Market volatility – https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqnglwvx/vol.PNG)

European finance ministers meet on Monday to discuss implementation of a 750 billion-euro coronavirus recovery fund, widely hailed as game-changing when it was announced earlier this year. But squabbles over disbursements threaten to sour the mood.

Germany is proposing a rule of law conditionality scheme for countries accessing funds from the bloc; some lawmakers favour an even stronger link. In July, the EU declined to settle details to avoid vetoes from Hungary and Poland. So the meeting could well see an outcry from those two countries.

The first bond sale to finance the SURE jobless scheme is weeks away, a step towards making the European Union one of Europe’s most significant borrowers. But delays to the fund spell bad news to economic recovery.

(Graphic: EU to join euro zone’s biggest borrowers – https://fingfx.thomsonreuters.com/gfx/mkt/gjnpwjzynvw/FseE6–nbsp-eu-to-join-euro-zone-s-biggest-borrowers.png)

As the world economy recovers, a gulf is opening between manufacturing and services, the latter hit by renewed COVID curbs and the ending