Arguably, one of this week's biggest surprises has to be that oil prices continued to recover, helped by gasoline inventory draws, and the fingers crossed possibility a US stimulus deal is in the works sooner than expected. But in the context of shoulder season demand, news flow on rising COVID infection rates, a stronger US dollar, and the prospect of Libyan exports restarting—all of which are likely to pressure crude next week.

With stock markets stabilizing somewhat ahead of the weekend, I am not sure how much value there is in chasing Forex today, so it could be a cleanup affair into the weekend unless a headline surprise on the fiscal front. Even then, the ambiguity of how to trade the US Dollar on a US fiscal pump is probably a question best left until next week.

China's largest property group, China Evergrande (OTC:EGRNY), was in the spotlight overnight after reports that it had warned local officials of a potential cash crunch. The sentiment was also not helped as it emerged that at least five Chinese banks and two trust firms held emergency discussions around their exposure and access to collateral.

If you take that story and consider some of the comments from Wednesday's Dallas Fed energy survey regarding peak oil and undeclared bankruptcies, you can see why investors are getting nervous.

Data from Refinitiv Lipper showed that high yield investors withdrew $4.2bn in the week ending 23rd September. That is the most massive outflow since July and the 10th largest outflow on record. In comparison, investment-grade funds continued to take in funds with inflows of $4.16bn last week.

Australian bank stocks outperformed overnight, helping the All Australian 200 finish the day up 1.53%, making it the best performing market in the overnight session. The sector was boosted by comments from Treasurer Josh Frydenberg around the easing of lending standards to boost the economy. Responsible lending obligation rules will be overhauled, allowing banks to rely on borrowers' income and spending information instead of banks' verification processes.

In the US, the Democrats are putting together a new stimulus proposal to compromise with the Republicans. The package is worth $2.4tn compared to the $500bn package the last Republican bill passed. The pressure to try and find some middle ground is also growing on the Democrats, mostly from swing districts. 
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