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Good morning. President Donald Trump has Covid-19, Brexit talks remain keenly in focus and virus hotspots are emerging again. Here's what's moving markets.

Trump Tests Positive

President Donald Trump said via a tweet that he and first lady Melania Trump have tested positive for Covid-19. The president had been self-quarantining after one of his closest aides, Hope Hicks, tested positive. Trump has also just moved a rally planned in one part of battleground state Wisconsin to another following concerns raised about a lack of face masks and social distancing at his events. Meanwhile, House Democrats passed a $2.2 trillion fiscal stimulus package but failed to reach an agreement with Republicans on the plans, despite the most concerted talks between the parties' top negotiators since early August.

Hotspots

Virus infection rates in big cities are once more turning them into hotspots. On Thursday, New York reported the most new cases since May, while London is said to be at a "tipping point" with numbers continuing to rise. The U.K. extended a ban on household mixing to the city of Liverpool and several other parts of northeast England. Elsewhere, the dispute between local and national government in Spain over new virus restrictions continues and questions have been raised about Turkey's methodology for reporting cases. Parisian restaurants may be closed again amid rising infections and a Scottish National Party MP is facing calls to quit after breaking the rules.

Progress

Friday will be decision day for whether the European Union and the U.K. can enter the final stage of talks to reach a trade deal, with reports that the two are reaching the so-called "tunnel'" stage said to be too optimistic at this point. Currency traders got a taste of what is likely to come with the pound's erratic Thursday. It swung in trade as headlines emerged about the two sides being at loggerheads over state aid and the EU starting legal proceedings against the U.K. over its plans to breach the withdrawal agreement. Volatility is likely to be the order of the day again on Friday, with eyes on the pound and the U.K.'s stock market for a reaction to any progress, or lack thereof, in the talks.

Crude Awakening

A falling oil price came roaring back into view on Thursday amid conflicting signals about U.S. fiscal stimulus and concerns about rising supplies from global producers. Crude is now set for its second consecutive weekly decline. The dip helped to send Royal Dutch Shell Plc and BP Plc shares to 25-year lows, following the former's reorganization plans which made clear the scale of the task it faces in retooling its business away from oil towards green energy. U.S. oil giant Exxon Mobil Corp. also flagged more losses ahead, putting more pressure on its ability to pay a dividend. Oil's weakness also stands to overshadow the coming quarter for Middle East markets, as current crude prices can't balance the budgets of the region's exporters.

Coming Up…

U.S. and European equity-index futures fell sharply after the president said he had tested positive for Covid, with Asian stocks also down and the dollar climbing. There is not much on the earnings calendar but there will be an update from Grenke AG, the German vehicle leasing firm which was recently attacked by a shortseller and is now the subject of a regulatory probe. U.S. payrolls will top the economic agenda later in the day. Also, watch for any impact on miners from the slump in copper prices, the biggest fall since March.

What We've Been Reading

This is what's caught our eye over the past 24 hours. 

And finally, here's what Garfield Reynolds is interested in this morning

The stimulus stalemate is among the reasons why risk assets sold off on the news that President Donald Trump tested positive for Covid-19 and will be in quarantine. That adds further distractions to a political scene that was already fraught with divisions over efforts to inject fresh spending into the economy. The Democrat-dominated House of Representatives had passed a $2.2 trillion stimulus package that the Senate has vowed to reject. Hopes for some sort of compromise have rested with talks between House Majority Leader Nancy Pelosi and Treasury Secretary Steven Mnuchin. Trump's illness will add to concerns no deal will be made. That would be bad news for the many Americans set to lose their jobs as companies announce cutbacks -- from airlines, to Disneyland and major banks. Equities are likely to take a hit too, given the way they were looking vulnerable amid declines in personal income that followed the expiry of previous stimulus measures.

Garfield Reynolds is a Markets Live reporter and editor for Bloomberg News in Sydney.

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