Stock markets drop ahead of US presidential debate – as it happened - Digital Innovation for a Sustainable Future

Shares are down, volatility is up, and the Mexican peso is under pressure ahead of presidential debate between Hillary Clinton and Donald Trump (at 9pm New York/2am BST)

Latest: Dow Jones closes down 166 points
Volatility jumps as investors brace for drama
London stock market suffers biggest fall since Brexit vote
Bloomberg poll puts Clinton and Trump in a tie
Presidential debate looms as Clinton-Trump race tightens – campaign live

9.15pm BST

Ding ding ding…. the closing bell on the New York stock exchange has been rung.

And the US stock market has lost almost 1%, as investors brace for tonight’s clash between the two candidates to become US president.

Best proxy for a Trump victory, the Mexican peso just hit an all time low. Down 30% since Trump began campaign #Debates2016 #DebateNight

Global govt bond yields fall on haven demand. 10y US yields have sunk to 1.59% after hitting 1.75% earlier in Sep, 10y Bund yields at -0.12% pic.twitter.com/O4YHAAARof

8.59pm BST

Donald Trump hasn’t released a massive amount of detail about his policy platform if he becomes president.

That’s one reason the markets are nervous about the presidential race.

Trump has made some disconcerting comments regarding a lack of commitment to debt repayments.

If a substantial global event like the financial crisis were to occur again, this may mean domestic debt is paid while foreign debt remains outstanding. Could this deter investors?

8.38pm BST

Richard Scalone, co-head of foreign exchange at TJM Brokerage in
Chicago, says US election uncertainty isn’t helping the dollar.

He told Reuters that:

“Most market participants are waiting to see what comes out of the debate tonight and will take their cue from there.”

8.36pm BST

US Treasuries (American government debt) have rallied today, on nervousness ahead of tonight’s debate.

This has pushed the yield (or interest rates) on 10-year Treasury bonds down to 1.587%, from 1.6% on Friday.

“A lot of the gains in Treasuries are safe-haven trades….Stocks are also looking pretty weak with a lot of concerns about financials with Deutsche Bank.”

8.16pm BST

Hillary Clinton has a five point lead over Donald Trump, according to the latest weekly tracking poll from NBC News.

New @NBCNews poll: Clinton leads Trump by 5 points just hours ahead of the first presidential debate https://t.co/sZBfcHQdFg #debates pic.twitter.com/HuOiEFC2o9

The latest polling is consistent with a Clinton lead of only ~1% nationally. State firewall breaking up. Trend lines awful.

8.06pm BST

Stocks are still down on Wall Street, with just under an hour to go until the closing bell.

The Dow is currently off 159 points, or 0.8%, at 18101 — a level it’s been hovering around for most of the day, really. The S&P 500 and the Nasdaq are showing similar losses.

Disney stock slides toward 7-month low on report of potential Twitter bid: https://t.co/sDdLJD08Cf pic.twitter.com/5aeP4E4556

8.01pm BST

CNN aren’t pulling their punches — they predict that stock markets will probably tumble on Tuesday if Trump wins tonight’s debate.

Here’s a flavour:

Wall Street doesn’t want a President Trump (with the exception of a few hedge fund managers and Trump supporters, like Carl Icahn). As the old saying goes, the market loves good news, it can deal with bad news, but it hates uncertainty. And Trump is the motherlode of uncertainty.

“The typical investor just can’t contemplate the possibility of a Trump victory,” says Cary Leahey, chief U.S. economist at Decision Economics….

“If for some reason Trump puts on a presidential showing…and Clinton stumbles for whatever reason, then the market may take another reassessment,” says Leahey. That’s the polite way of saying, stocks are likely to fall.

If Donald Trump wins the debate, stocks likely to tank https://t.co/3nNsdIs7te pic.twitter.com/MBHr1fAcho

7.48pm BST

Donald Trump’s protectionist rhetoric is a particular worry for Wall Street.

CNBC’s Elizabeth Gurdus reports that:

“I think neither candidate has super market-friendly policies,” Dean Curnutt, CEO of Macro Risk Advisors, said on CNBC.

“Both have been reasonably anti-trade. Clinton was pulled pretty far left by Bernie Sanders. Trump’s policies really resemble very little of what we typically associate with free-market Republicanism.”

Who’s good for markets: Analysts say neither Trump nor Clinton https://t.co/MBL0M26IAt

7.33pm BST

Mexico’s manufacturers might want to raise a glass to Donald Trump; by weakening the peso, he’s made their exports much more competitive:

Make #Mexico exports cheaper again pic.twitter.com/t8txX8KWbh

7.13pm BST

The US dollar is already dropping against the yen, even before the two nominees take to the stage in New York.

One dollar now gets you 100.29 yen in the FX market, down 0.7% compared to Friday, when your greenback was worth 101.1 yen.

6.44pm BST

The US, Canada, Brazil and Mexico stock markets are all down today, following losses across Europe.

It’s more of an adjustment than a rout, though – with Wall Street losing less than 1% so far.

6.36pm BST

There could be a surge of money into safe-havens if Donald Trump outperforms expectations on tonight’s debate, City experts say.

Chris Beauchamp of IG predicts that the Japanese Yen and US government bonds (Treasuries) could both benefit:

Tonight’s US presidential election debate is a major event for financial markets, with risky assets likely to see significant volatility, should Trump manage to further build on the gains he has made over recent weeks.

Despite significant movements towards Trump in recent polls, IG clients perceive there still to be a 62% chance of a Clinton win, according to the IG binary market. That being said, Hilary remains a somewhat uninspiring personality and there is a distinct risk that tonight’s debate could see the polls tighten even further, thus driving investors towards havens such as the yen and Treasuries.

6.27pm BST

Some investors are looking at the Presidential Race as a serious chance to make money. The rest are just worried about losing what they’ve already got.

But how do you trade, say, a Donald Trump victory?

Citigroup Predicts Record Mexico Rate Boost as Trump Sinks Peso https://t.co/CtTgp7LTO1 via @markets pic.twitter.com/9PTypB2KnY

6.14pm BST

Volatility is also rising on Wall Street today as the race to the White House hots up.

The CBOE Market Volatility index, or VIX (commonly known as the “fear gauge”) is up 1.9% today – the biggest rise in a fortnight.

With just over six weeks until Election Day, some investors see a toss-up contest creating volatility in certain sectors, including health insurers, drugmakers and industrials.

“Investors are acting extremely nervous with regards to the debate … and it highlights the fact that the markets are not focusing on the health of the economy, interest rates and geopolitical events,” said Robert Pavlik, chief market strategist at Boston Private Wealth.

6.09pm BST

Wall Street banks Goldman Sachs and JP Morgan are the biggest fallers on the Dow Jones industrial average today.

They’re both down around 1.8%, as financial stocks suffer from worries over the health of Germany’s Deutsche Bank.

6.03pm BST

Over in Greece the former deputy premier Evangelos Venizelos has warned the country faces political, social and economic disintegration as financial indicators worsen and the government scrambles to push through long overdue reforms. Helena Smith reports from Athens:

Venizelos, finance minister at the height of the Greek debt crisis, issued a withering assessment of the government’s performance in office.

In a speech to businessmen on the future of Greece at the Thessaloniki chamber of commerce and industry the politician said the country was in danger of “institutional, economic and social collapse” because the leftist-led coalition lacked a strategic plan to exit its long-running debt crisis.

Instead, he claimed, ministers were working to the slogan “we are doing well and will do better” and were turning a blind eye to real problems as the nation’s real economy plummeted. “The government is making out as if it doesn’t understand how critical things are. Its theory ‘we are doing well and will do better’ is a spring that will pop up.”

Venizelos, whose Pasok socialist party was in office with the main opposition conservatives until being ejected by Syriza, the radical left group led by prime minister Alexis Tsipras, spoke as the government prepared to push more creditor-mandated reforms through parliament tomorrow.

“Populism doesn’t solve problems. Populism creates problems,” he told a conference in Riga. “We could see that in the … classical example of Greece. A new government came with a populist stance, that ‘we don’t need any austerity regimes, we will spend as much as we want’ … and, in fact, Greece now implements tougher austerity measures than it would have been necessary if [reforms] of the previous government were continued at the time.”

#IMF issue preliminary findings following mission visit: makes for fascinating reading https://t.co/BeYsasN7Ox

#Greece has made significant progress in unwinding its macroeconomic imbalances, but growth has remained elusive and risks are high.” #IMF

5.57pm BST

Britain will get no favours in the Brexit discussions, ECB president Mario Draghi hinted in his testimony to the European parliament. In his opening speech Draghi – the latest to suggest Europe will take a tough line in the negotiations – said:

Regardless of the type of relationship that emerges between the European Union and the United Kingdom, it is of utmost importance that the integrity of the single market is respected. Any outcome should ensure that all participants are subject to the same rules.

It is very hard to imagine that any agreement that will be perceived as discriminatory against some subjects or in favor of other subjects could be a source of stability for the future of our EU.

5.12pm BST

A cocktail of concerns – from the forthcoming US presidential debate to worries about Brexit to uncertainty over the outcome of the current oil producers meeting in Algeria to a new drop in Deutsch Bank shares – combined to send European markets sharply lower at the start of the trading week. The final scores showed:

5.05pm BST

Bookmaker Ladbrokes has sent its buzzword bingo odds for the presidential debate, and here they are:

1/10 Make America Great Again

4.39pm BST

Some good news for Hillary and the reverse for Trump:

The Monogram Shop, in Long Island, has a Presidential predictor with a perfect track record. https://t.co/Zl1lXkSW9M

4.35pm BST

Back with the race to become US president, and the market’s reaction ahead of the head-to-head debate, Jasper Lawler, market analyst at CMC Markets, said:

Stocks in the US opened lower. A number of forecasters have raised their odds of a Donald Trump presidency ahead of the first of the presidential debates Monday evening. It’s Clinton the Wall Street darling versus Trump the Wall-builder.

With shares near highs of the year, it seems fair to say that markets have so far discounted the probability of a Donald Trump victory. Mrs Clinton is seen as a continuation of the status quo, which hasn’t exactly provided stellar growth and economic opportunity for America’s poorest in the last decade. Donald Trump wants to shake up the status quo, from a market’s perspective that necessarily means uncertainty.

4.25pm BST

Draghi tells MEPs he takes “very seriously” their comments-at least he didnt say “I take note of your comments”

4.04pm BST

Asked about Deutsche Bank – whose shares have fallen sharply today – Draghi refuses to comment.

And on Brexit, he says the ECB does not have an official role in the negotiations but may work in an advisory capacity.

3.57pm BST

ECB’s Draghi: ECB Officials ‘Never Discuss Exit Strategies’

One to add to the #Draghi punchlines list : “policy makers should be very careful about having opinions on things never discussed by them”.

3.49pm BST

In questions Draghi repeats this theme:

It is clear other policies should complement monetary policy action to reap all the benefits of the present monetary policy stance.

#Draghi: “we have to accept the fact” that low interest rates are “a symptom of low growth” and not a pure creation of central banks.

3.37pm BST

In his conclusion Draghi again suggests the ECB needs others – politicians particularly – to step up and do their bit for the EU:

For the euro area to thrive, actions by national governments are needed to unleash growth, reduce unemployment and empower individuals, while offering essential protections for the most vulnerable….

The political commitment underpinning our single currency has been strongly reaffirmed during the crisis. Important efforts have been made.

3.20pm BST

On the effect of low (and indeed negative) interest rates, he said:

Low rates are a symptom of the underlying economic situation. They reflect weak long-term growth trends and the protracted macroeconomic slump that has resulted from the crisis.

The ECB’s monetary policy has provided significant accommodation to limit the negative effects of the global and euro area-specific shocks on the economy, thereby mitigating their disinflationary impact.

3.17pm BST

Mario Draghi’s opening remarks to the European Parliament have been released, and the European Central Bank president said that so far the European economy has stood up to the challenge of Brexit, so far:

The recovery in the euro area is expected to continue at a moderate and steady pace, but with slightly less momentum than envisaged in June.

On the positive side, incoming information continues to point to the euro area economy being resilient to global and political uncertainty, notably following the UK referendum outcome. The initial impact of the vote has been contained and the strong financial market reactions, such as equity price falls, have largely reversed….

3.09pm BST

A bit of US economic news, and new home sales fell less than expected in August.

The Commerce Department said sales of single family homes fell 7.6% to 609,000 compared to expectations of a decline to 600,000. July’s figure was revised up by 5,000 units to 659,000.

2.55pm BST

Here’s our US live blog of latest developments in the presidential race ahead of the Clinton-Trump debate:

2.43pm BST

Back with the US debate, and Robert Shapiro of advisory firm Sonecon has looked at the economic prospects under the two candidates:

Trump says he’ll restore 4% annual growth, or double our current rate. But his plan to achieve it is a deceit that would actually slow growth by deporting part of the labor force and ignoring everyone’s productivity. There’s no silver bullet, but Hillary’s program would help. Her path to citizenship and commitments to pay equity, child care assistance, universal health coverage, and more would expand the labor force. Furthermore, her pledges for tuition-free college, more support for R&D, and more access to loans for young businesses would all help raise productivity. It’s an easy choice.

2.39pm BST

Elsewhere Mario Draghi, the head of the European Central Bank, is due to make his regular appearance before the European Parliament within the next half hour or so. He normally reads out his last governing council statement before being quizzed by MEPs, with Brexit of course high on the agenda.

The session should be available here.

2.35pm BST

As expected US markets are falling in early trading, ahead of the presidential debate between Hillary Clinton and Donald Trump. Investors are also jittery as oil producers meet in Algeria, with few expecting any positive decisions to curb the slump in the crude price although some are at least hoping for guidance that something may be done at Opec’s November meeting. The uncertainty over Brexit is not helping, nor is concern about Deutsche Bank after its shares fell sharply.

So the Dow Jones Industrial Average is down 105 points or 0.5%, while the S&P 500 and Nasdaq Composite opened down a similar amount.

2.25pm BST

You can get psyched up for tonight’s presidential debate by reading Dan Robert’s list of 10 awkward question for the two candidates.

Hillary Clinton should be ready for probing questions on globalisation, her counter-terrorism strategy and secrecy issues, while Donald Trump will need answers on his Middle East strategy, his suitability (or otherwise) for the most powerful job in the world, and whether he regrets anything he’s said during this most remarkable campaign.

1.16pm BST

It’s been a bad morning on Europe’s stock markets, with Deutsche Bank’s problems and the looming presidential debate both hitting investor confidence.

The FTSE 100 index of leading shares in London is still down around 1.25%; banks, builders and mining stocks are all leading the selloff.

Risk appetite has faded with many analysts pointing to the tightening of the US presidential elections and uncertainty around tonight’s debates as the primary catalysts.

Donald Trump’s track record of supporting anti-establishment issues and candidates, such as Brexit and Russian President Putin, will legitimize Eurosceptic groups. With the EU questioning its post-Brexit future and elections in France, Spain and Germany, empowered fringe parties could potentially redefine the geopolitical landscape.

The new week has started with a bang, as the parlous state of Deutsche Bank explodes onto everyone’s radar once again.

The bank has been limping along for months now, but reports that Angela Merkel may not step in to rescue the bank have sent the shares tumbling, dragging banks across the UK and Europe lower as a result. The gut feeling of most investors is that Berlin would be forced to act to avoid the loss of a key institution, but gut feelings do not always make the best trades.

1.15pm BST

Deutsche Bank’s head of communication, Joerg Eigendorf, has just told CNBC that the bank “strongly intends” to resolve its problems.

Eigendorf denied that CEO John Cryan had appealed, in vain, to Angela Merkel,and reiterated that Deutsche does not need to raise fresh capital (despite the threat of a $14bn fine in the US).

JE: This is just wrong. At no moment of time. No point of time, John Cryan has asked the Chancellor for support in the negotiations with the Department of Justice and he doesn’t intend to do that. He’s very strong in that position.

Deutsche spokesman tells CNBC reports of Cryan/Merkel meeting are “just wrong”

JE: Just look, I mean yes the share price is low. But that is not what is worrying us and that is not what we are really looking. What is really important to us is Our credit story which is very strong.

Its fundamentally strong and a lot of those in the market understand if they analyse the basics and the fundamentals that we are quite strong. Look at our credit story, value add risk very low, our credit portfolio very strong, liquidity position very strong, very comfortable and the third quarter is almost over.

JE: Again that is pure speculation. And for us it’s just not a question. Deutsche Bank strongly intends to solve its problems or its challenges by itself and we don’t think about anything else. We do our homework here. We are structure of the bank.

We try to get the litigation issues out of the way because this is creating this uncertainty. A lot that is out there in the market right now. It’s just pure speculation and uncertainty that was created by this and this is what we try to do. And by doing our homework, we will get this. This uncertainty out of the market again.

JE: We are very committed and we are doing our job. We are we are out there today and doing our homework. And the speculations, again, this is as if we need something today. We are fulfilling all capital requirements comfortably right now and that is not that is just speculation for the future and we have said time and once we got through the Canadian litigation issue all of the way once we get that restructuring done, the operative strengths of the bank will be seen again and once it is seen people will then these speculations will hopefully end.

JE: Again this is just not a question for us right now. We fulfil the capital requirements. We have time to fulfil future capital requirements and that’s what we are working on.

12.54pm BST

The pound is on track to hit a five-week low, amid speculation that the UK could be heading for a ‘hard Brexit’.

Sterling has fallen by half a cent to $1.293, which would be the lowest closing level since mid-August.

“The recent news reports that a so called ‘hard Brexit’ seems the more likely strategy for the UK’s EU departure and this has had a dramatic impact on the pound, with sterling falling to a five week low.

Despite the lost ground, the pound had regained last week in reaction to unchanged interest rates from the Fed, but has slumped as comments from the Ministers in charge of Brexit suggest that the UK would push to become a part of the World Trade Organisation –the strongest indication yet of divorce proceedings that forgoes prolonged negotiations for single market access with the EU.

The danger of hard talk now is that it increases uncertainty, reduces confidence and will result in businesses triggering their exit plans from the UK.

12.17pm BST

Trump and Clinton are now neck-and-neck in the race for the presidency, according to a new poll from Bloomberg.

Full four-way Bloomberg poll with Trump now taking the lead. https://t.co/6TJLT4yik6 pic.twitter.com/0qiw7HJ9E5

Among likely voters under 35 years old, Clinton gets 50 percent to Trump’s 40 percent, down from her 29-point margin in August in the two-way race and from her 26-point margin in June in the three-way race.

The poll’s margin of error is plus or minus 3.1 points for top-line numbers, with 1,002 likely voters interviewed, and is higher among subgroups. It was taken Wednesday through Saturday, after Clinton took political heat for calling half of Trump’s supporters “deplorables” and for disclosing she had pneumonia after a video caught her falling ill at a Sept. 11 ceremony.

12.06pm BST

The FT’s Bryce Elder has explained how Deutsche Bank has been a poor investment for a long time….

Always learn something from Markets Live. This on Deutsche Bank is fascinating. https://t.co/Cu0p78ctHT pic.twitter.com/8YUBeXgoJG

11.51am BST

Back in the UK…the number of new mortgage approved by lenders has shrunk by 20%.

UK house prices: mortgages do not augur well. pic.twitter.com/D6bDC33JFj

11.48am BST

The German government is trying to slap down speculation that Deutsche Bank might need state aid (following those reports that Angela Merkel has declined to help).

Steffen Seibert, Merkel’s spokesman, insists that there is no reason to speculate about this issue at all.

“There is no reason for such speculation as presented there and the federal government doesn’t engage in such speculation.”

11.33am BST

Deutsche Bank has insists that it can tackle its current problems without tapping shareholders for fresh capital, in response to today’s selloff.

John Cryan at no point asked the German Chancellor for the government to intervene in the U.S. Justice Department’s mortgages case.

“Deutsche Bank is determined to resolve its challenges on its own…. There is currently no question of a capital increase. We are meeting all regulatory requirements.”

Deutsche Bank shares not at record low, but not good. Lowest since 1983 (not inc divis) or 1988 (inc divis) pic.twitter.com/882RH37EQz

11.12am BST

Turkey’s stock market is in a spin this morning, after Moody’s downgraded the country to Junk status on Friday night.

The BIST 100 index of leading shares has shed 4% this morning, with almost every company losing ground. Banking shares are leading the rout, dropping by around 6%.

#Turkey‘s BIST-100 down 4% after Moody’s credit rating downgrade to junk. pic.twitter.com/7hAhUqqqej

Turkish assets plummeted the most since the coup attempt after Moody’s cut https://t.co/KjzHRfm7f3 pic.twitter.com/qIiGqIV32s

10.22am BST

Mike van Dulken, Head of Research at Accendo Markets, says a “nasty cocktail” of worries and threats are hitting shares this morning.

They are:

Risk assets like Banks, Housebuilders and Miners are bearing the brunt of it this morning. Geopolitics appears to dominate.

10.20am BST

The financial pages of the UK newspapers are packed with Brexit stories.

“As a CEO, what you prefer in situations like this is quick clarity, quick stability so everybody knows the rules, everybody can adapt to the situation on the ground.

“As long as the situation on the ground is unclear people don’t know exactly whether big decisions are going to be right or wrong, so you get postponements [of decisions]. So for us that could be with our customers and it could be with our suppliers.”

Monday’s FT:
City fears Number 10 is shifting towards a ‘hard’ exit from EU#tomorrowspaperstoday #bbcpapers pic.twitter.com/j9AX5N3RBy

Panic has faded rapidly among the dozens of independent economists consulted by the Treasury as strong data in the three months since the vote reassured the analysts that any shock from the vote was far less severe than first feared.

Forecasts for 2016’s GDP growth had been chopped to 1.5pc immediately after the 23 June ballot, but economists have reversed those downgrades and now expect growth of 1.8pc – exactly the same as they predicted before the vote.

In July the average prediction was for growth of 0.5pc in 2017, but now it almost doubled to 0.9pc – though it remains below the 2.1pc average forecast before the vote.

10.00am BST

An early rally in the oil price has fizzled out.

Brent crude had jumped by 1% early doors, having shed over 3% on Friday. But it’s now down slightly at $45.80 per barrel.

“We will not come out of the meeting empty-handed.”

9.56am BST

Around £22bn has now been wiped off the FTSE 100 this morning, with the blue-chip index currently down 88 points or 1.2%.

9.51am BST

Bloomberg’s Matthew Campbell is also worried about Deutsche Bank:

Deutsche Bank shares over the last month. This is getting real… pic.twitter.com/o7QgA5n3wS

9.45am BST

Shares in Deutsche Bank have now hit their lowest level in over 24 years.

This morning’s selloff appears to be triggered by reports that chancellor Angela Merkel won’t provide any state assistance for the troubles lender.

Deutsche shares now down 6.66%. Devilishly hard to invest in.

9.35am BST

Newsflash from Berlin: German business morale has hit its highest level in over two years.

“Companies are clearly more optimistic about the months ahead. They are also more satisfied with their current business situation.

“The German economy is expecting a golden autumn.”

9.22am BST

Money is flowing out of shares and into safe-haven assets this morning.

This is driving up the value of German, US and UK government bonds, as investors hunker down ahead of the presidential debate.

Despite months and months of political drama one could make a fairly convincing argument for today being the real Day Zero for the US election. The first televised debate marks the point where Trump vs Clinton will be even more unavoidable than it already is, and therefore has reminded the market that the Brexit, US interest rates and China’s economic slowdown aren’t the only macro-issues out there to worry about.

In other words, the markets have been reminded this morning that a Donald Trump presidency is still more than possible, sparking a sharp decline roughly on par with the gradual gains managed last week. The FTSE dropped 80 points to duck under 6850, while the DAX and CAC fell 1.6% and 1.8% respectively.

9.06am BST

European banking stocks are getting pummelled this morning.

Deutsche Bank is worst hit, shedding 6.6% to €10.65. It is dogged by the threat of a $14bn fine from US authorities for mis-selling mortgage-backed securities before the 2008 crash.

8.58am BST

Wall Street bank Citi has raise the possibility of a Trump victory in November to 40%, up from 35%.

With the polls “starting to tighten”, Citi is predicting much volatility in the foreign currency markets and precious metals prices if the Republican candidate triumphs.

“Citi’s base case is for a Clinton victory and mostly continuity in policies, which would leave U.S. and global growth expectations relatively unchanged…

“But a Trump victory is a wild card and Citi expects this, among lingering uncertainties from Brexit and elsewhere, may cap the prospects for global growth to pick up in the remainder of the year.”

Citi says Trump could win, gold will go a bit nuts https://t.co/eK6SPxirzE pic.twitter.com/jVPCbKGsSp

8.48am BST

2016 has been a year of shocks, but could November’s presidential election be the biggest one yet?

Mike Bell of JP Morgan reckons Trump is a stronger candidate than many people believe:

JP Morgan Asset MGMT’s Mike Bell says the market is pricing in a low chance of Donald Trump winning #USelection — lower than reality

We’re starting the week in a slight risk-off mood, with Asian equities soggy, currency markets quiet, 10-year Treasury yields down a bit at 1.62% (the average of the month so far) and oil slightly higher ahead of the informal oil producers meeting.

Monday’s US presidential debate will probably break a new record, not in the S&P 500, but the number of viewers which according to media analyst could reach over 100 million Americans, surpassing Carter-Reagan debate in 1980 which attracted 80.6 million viewers. With Donald Trump closing the gap with Hillary Clinton in latest polls, the debate is becoming more interesting than any other TV show.

America’s direction, achieving prosperity and securing America are the three major topics at the first presidential debate.

8.35am BST

European stock markets are falling in early trading, as the City’s attention turns to the looming clash between Hillary Clinton and Donald Trump.

In London, the FTSE 100 index shed 1% at the open, and is now down 80 points at 6829 (updated).

Trump’s campaign manager did not rule out the prospect of the nominee getting personal onstage at Hofstra University in New York by summoning the ghosts of Bill Clinton’s sex life, insisting that the Republican candidate had “a right to defend himself”.

The two camps traded threats over who would be in the debate audience. After Clinton’s team confirmed that it had offered a front row seat to billionaire Trump critic Mark Cuban, Trump responded that he might invite Gennifer Flowers, a former model who had an extramarital encounter with Bill Clinton in the 1980s.

Clinton tries to get moderator to rein in Trump in tonight’s #US Presidential debate. She’s worried. Not hard for Trump to beat expectations

8.12am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

There are three key questions in the City this morning;

Tentative agenda @ief_dialogue in #Algiers:
Mon 26: ministers arrivals
Tue 27: IEF
Wed 28 morning: IEF
Wed 28 afternoon: #OPEC #OOTT #oil

The first of three debates promises to be a national sensation, contrasting two vastly different New Yorkers who are recognized around the world. Clinton, known for her extensive experience in government, is more comfortable discussing substantive issues than pitching her candidacy, and Trump excels as a self-promoter and an unsparing critic of his adversaries.

Hillary Clinton and Donald Trump prepare for the critical first presidential debate https://t.co/PG423YGBhh pic.twitter.com/50dQQfHlOu

Optimism dropped for the third consecutive quarter in the three months to September, according to the research jointly produced by the CBI business lobby group and the accountancy firm PwC.

It marked the longest run of deteriorating sentiment since the first quarter of 2009, when the global financial system was in the midst of a deep and prolonged crisis.

Stock markets drop ahead of US presidential debate – as it happened