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Emerging-Market Traders Cut Wagers on U.S. Election Volatility

Emerging-Market Traders Cut Wagers on U.S. Election Volatility

(Bloomberg) — Traders across the world may be coming around to the idea that the U.S. election isn’t going to be the tumultuous event it was once expected to be.

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But the real believers seem to be in emerging markets.

Optimism that the November election result will go uncontested and speculation a U.S. stimulus package will be agreed whatever the outcome are damping concern about fluctuations through year-end. Yet, while U.S. VIX futures declined last week as bets on likely price volatility eased, the drop was slower than for emerging markets.

“It does appear that emerging-market investors are slightly more sanguine about risks through the end of the year than what you’re seeing in developed markets,” said Nick Stadtmiller, a strategist at Medley Global Advisors in New York. “As long as global liquidity remains ample, and as long as global markets at least hold their ground, I would expect emerging-market assets to perform well. Yields on many emerging-market assets are high, especially relative to rock-bottom yields on developed market assets.”



chart: EM volatility index trades at a discount to the VIX gauge for U.S. stocks


© Bloomberg
EM volatility index trades at a discount to the VIX gauge for U.S. stocks

Falling volatility may give investors more confidence to put cash into an asset class enjoying one of its best phases since the virus-induced global sell-off in March. Citigroup Inc. said last week the worst is over for developing-nation assets and Morgan Stanley is betting volatility will continue to ease as the outcome of the November vote becomes clearer.

Emerging-market equities and currencies climbed to an eight-month high on Friday, while local-currency bonds had their best week since May on the prospect of U.S. fiscal stimulus. One-month implied volatility on the Brazilian real, South African rand and Russian ruble fell by the most among peers last week, signaling improved appetite for risk assets.

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Emerging-Market Traders Cut U.S. Election Volatility Wagers

Emerging-Market Traders Cut U.S. Election Volatility Wagers

(Bloomberg) — Traders across the world may be coming around to the idea that the U.S. election isn’t going to be the tumultuous event it was once expected to be.

Loading...

Load Error

But the real believers seem to be in emerging markets.

Optimism that the November election result will go uncontested and speculation that a U.S. stimulus package will have to be agreed whatever the outcome are damping concern about fluctuations through year-end. Yet, while U.S. VIX futures declined last week as bets on likely price volatility eased, the drop was slower than for emerging markets.

“It does appear that emerging-market investors are slightly more sanguine about risks through the end of the year than what you’re seeing in developed markets,” said Nick Stadtmiller, a New York-based strategist at Medley Global Advisors. “As long as global liquidity remains ample, and as long as global markets at least hold their ground, I would expect emerging-market assets to perform well. Yields on many emerging-market assets are high, especially relative to rock-bottom yields on developed market assets.”

Falling volatility may give investors more confidence to put cash into an asset class enjoying one of its best phases since the virus-induced global sell-off in March. Citigroup Inc. said last week the worst is over for developing-nation assets and Morgan Stanley is betting volatility will continue to ease as the outcome of the November vote becomes clearer.



chart: EM volatility index trades at a discount to the VIX gauge for U.S. stocks


© Bloomberg
EM volatility index trades at a discount to the VIX gauge for U.S. stocks

Emerging-market equities and currencies climbed to an eight-month high on Friday, while local-currency debt had its best week since May on the prospect of U.S. fiscal stimulus. One-month implied volatility on the Brazilian real, South African rand and Russian ruble fell by the most among peers last week, signaling improved appetite for

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Amtrak says 2,400 jobs could be cut without government bailout

Amtrak says 2,400 jobs could be cut without government bailout

  • Amtrak said Thursday that it could be forced to cut spending that could result in the loss of another 2,400  jobs in total.
  • Amtrak told Congress last month that it would need $4.9 billion in government funding as the pandemic continues to wreck the nation’s economy.
  • The US passenger railroad service already said in September that it was cutting 2,000 jobs.
  • Visit Business Insider’s homepage for more stories.

U.S. government-supported passenger railroad Amtrak said on Thursday that without a new government bailout it could be forced to cut more spending and train services which could lead to the loss of another 2,400 jobs.

Amtrak last month told Congress it needs up to $4.9 billion in government funding for the current budget year, up from the around $2 billion in annual support it usually receives.

The railroad, which said last month it was cutting 2,000 jobs, said on Thursday that without more support from Congress, reduced capital spending would result in the loss of 775 jobs and further reductions in train service by state partners would likely result in 1,625 job losses.

Without the new funding, Amtrak chief executive Bill Flynn said, “we will be unable to avoid more drastic impacts that could have long lasting effects on our Northeast Corridor infrastructure and the national rail system.”

U.S. transit and airline demand has been devastated by a massive falloff in travel due to the coronavirus pandemic.

In April, Congress gave Amtrak a $1 billion bailout after daily ridership fell by 96%.

Amtrak said on Thursday demand remains at about 25% of pre-COVID levels. It forecasts ridership and revenue for the 2020-21 budget year that started Oct. 1 will improve to “about 40% of pre-COVID levels, which is weaker than anticipated.”

U.S. passenger airlines are seeking a new $25 billion bailout to

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Economic relief talks are back on, Trump asserts, two days after he cut them off

Economic relief talks are back on, Trump asserts, two days after he cut them off

He said he believes Pelosi “wants it to happen, because it’s so good for our country, we really need it.”

Pelosi and Treasury Secretary Steven Mnuchin have begun negotiating over a bill to rescue airlines, with United and American furloughing more than 30,000 workers after federal payroll support measures expired last week.

Pelosi has not indicated publicly that other issues beyond airline aid are on the table right now, after Trump pulled the plug Tuesday on talks on a comprehensive relief bill with a pricetag between $1.6 trillion and $2.2 trillion.

But Trump said Thursday that other issues were also being discussed, including a new round of $1,200 stimulus checks. The labor market remains weak, with another 840,000 Americans filing for unemployment claims last week, more than six months after the coronavirus pandemic began in the United States.

“We’re talking about airlines and we’re talking about a bigger deal than airlines. We’re talking about a deal with $1,200 per person, we’re talking about other things,” Trump said. “But it’s not anybody’s fault, they were trying to get things, and we were trying to get things and it wasn’t going anywhere, I shut it down. I don’t want to play games. And then we reopened, and I see the markets are doing well but I think we have a really good chance of doing something.”

It remains highly uncertain that any deal can be reached, on airlines or anything else. Talks have been on again and off again for months, but ultimately Congress and the administration have been unable to strike a deal since the spring when they passed around $3 trillion in aid.

Multiple programs approved at that time have since expired, including enhanced unemployment insurance for individuals. It’s not clear whether congressional Democrats would be willing to support a

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