The Day at a Glance | October 9 2020

The Top

· There is still hope for fiscal stimulus in the US; Pelosi and Mnuchin resume negotiations after a shift in the President`s stance on the matter.

· PEMEX issued 1,500 million dollars of debt in Luxemburg, with a coupon of 6.875%; this is regarding the company`s refinancing.

· Oil is heading to log its best week since May after the closing of oil wells in the Gulf of Mexico due to hurricane Delta.

Economic environment

Market expectations of seeing a new fiscal stimulus in the United States remain intact after President Trump gave a dramatic shift in his stance on the matter and accepted negotiating a broad stimulus package. White House representative Steven Mnuchin has resumed negotiations with Democratic leader Nancy Pelosi less than a month away from the election. Various Republican legislators are still opposed to a package that includes aggressive aid – they are concerned by further increasing the country`s debt, which is why it`s unclear if there is enough political support to back the proposal. Additionally, there is a short amount of time to negotiate and carry out the legislative approval process with the House of Representatives currently in recess. It seems unlikely that the President will be able to sign an agreement before the end of October, but markets expect to see greater stimulus, even if it occurs after the election. Robert Kaplan and Eric Resengren, members of the Federal Reserve, once again called for the approval of fiscal measures as any decision from the FED would be insufficient to avoid a slower economic recovery without government action.