USD remains under pressure, Equities trade at all time highs and Sterling waits on a deal or no deal.
Unemployment remains the significant global issue. US weekly claims had a better week, beating expectations and registering 712,000 new claims. However, the November Nonfarm Payroll headline was a significant miss with only 245,000 of the expected 500,000 new jobs created.
President-Elect Biden continues to nominate candidates for his government, his latest appointment being retired General Lloyd Austin as Defence Secretary. President Trump still refuses to concede despite having lost 50 of 51 legal challenges. The Electoral College sits December 14.
The Pfizer/BioNTech vaccine is being rolled out in the UK from today, again helping to lift sentiment as the pandemic continues to grow. There have now been more than 67.0m confirmed cases and over 1.50m people are known to have died.
The latest attempt at the next round of government stimulus for the US economy, from the bipartisan group of lawmakers that proposed a $908 billion package, has been received favorably on all sides. Progress to avoid a US government shutdown also moved forward this week.
The USDIndex traded to 32-month lows this week. It plummeted to 90.45 following the NFP miss and remains below 91.00. EURUSD rallied again to top at 1.2170, USDJPY held narrow ranges over 104.00, and Cable rallied to test 1.3535 highs and 1.3220 lows as Brexit trade talks ebbed & flowed without a deal.
Global stock markets rallied again this week to register new all-time highs, S&P500 Futures breached 3700 for the first time. Positive vaccine news and expectations of more fiscal stimulus from the US continues to lift sentiment.
UK-EU trade negotiations continue to grind on; however, there is still no breakthrough as the next EU Summit looms this week. A limited free trade agreement is still expected given the explosive economic impact a no-deal exit would have. But still, even at this late stage, rule nothing out.
The Gold price rallied significantly this week to break back over the key $1850 level and top at $1875. Bitcoin continued to consolidate at highs, trading most of the week north of $19,000 and above support at $18,800, before testing down to $18,000 earlier today.
USOil prices recovered from the $44.00 post OPEC meeting floor, to peak at $46.65, before once again testing the crucial $45.00 level, ahead of this week’s inventories. The improving global sentiment underpins demand.
The yield on the US 10-Year Treasury Note spiked higher again this week, touching 0.9810 and within sight of 1.0000, before retreating to 0.9200. The anticipation of a US stimulus package and government funding agreement, record high stock markets and the weaker US Dollar, keep yields bid and Treasury demand weaker.
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Stuart Cowell
Head Market Analyst
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