Data: FactSet; Chart: Axios Visuals

Reduced inflation and stimulus expectations are combining with a notable uptick in coronavirus cases in the U.S. and especially in Europe where there is fear a second wave of the virus could again cause businesses to close and dent the global economic recovery.

The intrigue: That would normally provide a boost for bond prices and precious metals, but gold and silver are instead following inflation expectations lower. And government bond yields have fallen nearly as low as they can without the Fed resorting to negative interest rates, says Subadra Rajappa, head of U.S. rates strategy at ‎Société Générale.

  • "Treasuries don’t have anywhere to go from here," Rajappa says, noting that she expects to see yields on the benchmark 10-year note stay between 0.5% and 1% given the massive U.S. budget deficit and weak demand at recent Treasury auctions.

What to watch: Gold and silver prices have fallen meaningfully in the last two weeks, with gold down 5.5% and silver down 18% since Sept. 1. But Axel Merk, president and portfolio manager at Merk Hard Currency Fund, says he expects this will be a bump in the road on the way higher.

  • "In the long run we’ll be cranking a boatload of money and spending a boatload of money but in the short-term inflation expectations have come down a bit, which is very consistent with what happens in a risk-off environment."

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Dion Rabouin, author of Markets
Oct 23, 2020 - Economy & Business

Turkish lira's crash shows the value of central bank confidence

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Data: FactSet; Chart: Axios Visuals

The value of the Turkish lira against the dollar fell more than 2% immediately following the central bank's decision not to adjust its benchmark one-week repo rate, sending the currency plummeting to its lowest level on record.

Why it matters: Turkey is becoming a cautionary tale of what can happen when a central bank loses its independence and credibility and is effectively controlled by the president.

Pence to continue traveling despite aides testing positive for COVID-19

Marc Short with Pence in March. Photo: Drew Angerer/Getty Images

Marc Short, Vice President Mike Pence’s chief of staff, tested positive for the coronavirus Saturday and is quarantining, according to a White House statement.

Why it matters: Short is Pence's closest aide, and was one of the most powerful forces on the White House coronavirus task force. Pence and second lady Karen Pence tested negative for the virus on Sunday morning, according to the vice president's office.

AOC: "Extremely important" that Biden offer Bernie Sanders a Cabinet position

Rep. Alexandria Ocasio-Cortez (D-N.Y.) said on CNN's "State of the Union" Sunday that she believes it's "extremely important" that Joe Biden offer Sen. Bernie Sanders and other progressive leaders Cabinet positions if he's elected president.

The big picture: Ocasio-Cortez was pressed repeatedly on policy differences between her and the more moderate Biden, including her opposition to fracking and support for Medicare for All. She responded that it would be a "privilege" and a "luxury" to be able to lobby a Biden administration on progressive issues, insisting that the focus right now should be on winning the White House.