Equities traded mixed yesterday and today in Asia, with some investors staying optimistic over a potential coronavirus vaccine, and others perhaps starting to worry again over the virus’s economic effects. In the FX sphere, the pound was the main G10 loser, tumbling on headlines that there was no progress in Brexit talks. With regards to the energy world, oil traders will keep their gaze locked on a potential outcome in the OPEC+ talks.

Equities Trade Mixed as Covid Concerns Resurface

The US dollar continued trading lower against all but three of the other G10 currencies on Wednesday and during the Asian session Thursday. …

Equities rose, while the US dollar and the Japanese yen slid on Tuesday, as investors turned their attention back to developments surrounding a potential COVID-19 vaccine. What may have also lifted sentiment is the testimony of Fed Chief Powell and Treasury Secretary Mnuchin, where the two officials agreed on more support for small businesses. On top of that, a group of US Congress members proposed a virus relief package in a bid to pass it sometime this month.

Equities Gain, USD Slides on Vaccine and Stimulus Hopes

The US dollar traded lower against all but two of the other G10 currencies on Tuesday and during the Asian session Wednesday. It lost the most ground against EUR, SEK, and CHF in that order, while it was found virtually unchanged versus AUD and JPY. …

Esta semana comienza con la reunión de la OPEP +, donde las principales naciones productoras de petróleo decidirán si extienden los recortes existentes o aumentan la producción. También tenemos una decisión de política monetaria del RBA el martes, pero no esperamos ninguna acción. El martes y miércoles, el presidente de la Fed, Powell, y el secretario del Tesoro, Mnuchin, testificarán ante el Congreso, mientras que el viernes se darán a conocer los datos de empleo de Estados Unidos para noviembre.

El lunes, el evento principal en la agenda puede ser la reunión entre los principales productores de petróleo de la OPEP y no OPEP, conocido como el grupo OPEP +. Siguiendo los desarrollos positivos en torno a una posible vacuna contra el coronavirus, los precios del petróleo han ganado decentemente, y sería interesante ver si los miembros estarán dispuestos a aumentar la producción o mantener los recortes existentes. Se esperaba que el grupo aumentara la producción de petróleo en 2 millones de barriles por día, a partir de enero, pero según la charla de los medios, ahora se espera que retrase esos planes durante al menos tres meses. Entonces, ¿qué significa esto para los precios del petróleo? Es poco probable que una prórroga de tres meses mueva el barco y, por lo tanto, no esperamos ninguna reacción importante del mercado. Ahora, en caso de que la extensión sea de seis meses o más, es probable que los precios del petróleo aumenten, mientras que en caso de que logremos un aumento de la producción, es posible que veamos un retroceso. …

Cette semaine commence par la réunion de l’OPEP +, au cours de laquelle les principaux pays producteurs de pétrole décideront de prolonger les réductions existantes ou d’augmenter la production. Nous avons également une décision de politique monétaire de la RBA mardi, mais nous ne prévoyons aucune action. Mardi et mercredi, le président de la Fed Powell et le secrétaire au Trésor Mnuchin témoigneront devant le Congrès, tandis que vendredi, les données sur l’emploi aux États-Unis pour novembre devraient être publiées.

Lundi, l’événement principal à l’ordre du jour pourrait être la réunion entre les principaux producteurs de pétrole de l’OPEP et des non-OPEP, connu sous le nom de groupe OPEP +. À la suite des développements positifs autour d’un vaccin potentiel contre le coronavirus, les prix du pétrole ont progressé substantiellement et il serait intéressant de voir si les membres seront disposés à augmenter la production ou à maintenir les réductions existantes en place. Le groupe prévoit d’augmenter la production de pétrole de 2 millions de barils par jour, à partir de janvier, mais selon les médias, il envisage de retarder ces programmes d’au moins trois mois. Alors, qu’est-ce que cela signifie pour les prix du pétrole ? Il est peu probable qu’une prolongation de trois mois fasse basculer le bateau, et nous ne prévoyons donc pas de réaction significative du marché. Maintenant, dans le cas où la prolongation serait de six mois ou plus, les prix du pétrole devraient gagner, tandis que dans le cas où nous obtiendrions une augmentation de la production, nous pourrions voir un recul. …

Diese Woche beginnt mit dem OPEC + -Treffen, bei dem die größten Ölförderländer entscheiden, ob sie die bestehenden Kürzungen verlängern oder die Produktion wieder etwas hochfahren wollen. Wir haben am Dienstag auch eine geldpolitische Entscheidung der RBA, wobei wir jedoch keine Maßnahmen erwarten. Am Dienstag und Mittwoch werden der FED-Vorsitzende Powell und US Finanzminister Mnuchin vor dem Kongress aussagen, während am Freitag die US-Beschäftigungsdaten für November veröffentlicht werden sollen.

Am Montag könnte das Hauptereignis das Treffen zwischen dden großen OPEC- und Nicht-OPEC-Ölproduzenten sein, welche als die OPEC + -Gruppe bekannt ist. Nach den positiven Entwicklungen im Zusammenhang mit einem potenziellen Coronavirus-Impfstoff sind die Ölpreise wieder merklich gestiegen, und es wäre interessant zu sehen, ob die Mitglieder bereit sind, die Produktion zu steigern oder die bestehenden Kürzungen beizubehalten. Es wurde erwartet, dass die Gruppe die Ölproduktion ab Januar um 2 Mio. Barrel pro Tag steigern würde. Laut Medienberichten werden diese Pläne nun voraussichtlich um mindestens drei Monate verzögert. Was bedeutet das für die Ölpreise? Eine Verlängerung um drei Monate wird den Kahn wahrscheinlich nicht nennenswert ins Wanken bringen, und daher erwarten wir keine größeren Marktreaktionen. …

Equities retreated on Monday, perhaps due to end-month portfolio rebalancing, but Asian stocks traded higher today, as China’s Caixin PMI rose to a more-than-three-year high. Overnight, we also had an RBA policy decision, with officials standing pat and reiterating their readiness to do more if needed, while today, Fed Chair Powell and Treasury Secretary Steven Mnuchin will testify before Congress.

Aussie Unfazed After RBA, Powell and Mnuchin Testify

The US dollar traded higher against the majority of the other G10 currencies on Monday and during the Asian session Tuesday. It slightly underperformed only versus GBP, CAD, and NZD, while it gained the most against SEK, JPY, and CHF.

The strengthening of the US dollar suggests that markets traded in a risk-off fashion for most of the day. However, the weakening of the Japanese yen and the Swiss franc points otherwise. Thus, in order to get a clearer picture with regards to the broader market sentiment, we prefer to turn our gaze to the equity world. There, major EU and US indices finished their trading in negative waters, perhaps due to end-month portfolio rebalancing. Nonetheless, Asian indices were in the green, perhaps due to China’s Caixin manufacturing PMI rising to 54.9 from 53.6, beating estimates of a downtick to 53.5.

This week starts with the OPEC+ meeting, where major oil producing nations will decide whether to extend the existing cuts, or increase output production. We also have an RBA monetary policy decision on Tuesday, but we don’t expect any action. On Tuesday and Wednesday, Fed Chair Powell and Treasury Secretary Mnuchin will testify before Congress, while on Friday, the US employment data for November are due to be released.

On Monday, the main event on the agenda may be the meeting between major OPEC and non-OPEC oil producers, known as the OPEC+ group. Following the positive developments around a potential coronavirus vaccine, oil prices have decently gained, and it would be interesting to see whether members will be willing to increase output, or keep the existing cuts in place. The group had been expected to increase oil production by 2mn barrels per day, from January, but according to media chatter, it is now expected to delay those plans for at least three months. So, what does this mean for oil prices? A three-month extension is unlikely to rock the boat and thus, we don’t expect any major market reaction. …

Scandinavian Data, Brexit And Cryptos

Today will be a relatively quiet day in relation to the economic data releases from around the world. With the US markets having a half day due to the ongoing Thanksgiving celebrations, this means that the volatility could remain very modest.

Some European Data

This morning we have already received a few data sets of some individual states from the European continent. Norway delivered its core retail sales figure for the month of October, together with the non-seasonally adjusted unemployment rate number for November. The first set came out +1.2%, which is much better than the initial forecast of -0.1% and the previous +0.3%. The n.s.a. unemployment rate is expected to have increased from 3.5% to 4.0%, which could be a disappointment for the Norwegian economy. That said, the headline unemployment number, which was released by Norway on Wednesday, showed a slightly improvement of one tenth of a percent, which went from the 5.3% …

Yesterday, the day was filled with data and various news from around the world. One of the main news out of the European political life was surrounding the Brexit deal negotiations. With the US markets closed today and having a half day on Friday, the country dropped a pile of data yesterday for the market to digest.

Change Of Tone In Brexit Deal

Yesterday, the day was filled with data and various news from around the world. One of the main news out of the European political life was surrounding the Brexit deal negotiations. If Monday was full of positive headlines that there is progress in the Brexit talks, on Wednesday it was a different picture. The air was filled with skepticism that a deal could be reached. Boris Johnson reassured that UK’s position on fisheries has not changed and that there won’t be any extension of the transition period. The European Commission president, Ursula von der Leyen, tweeted out, quote: “Later on, we will get the minutes from the last FOMC meeting. Investors will try to seek clarity on how policymakers are willing to proceed further. During the previous meeting, the Fed decided to take a wait-and-see approach, because of the uncertainty surrounding the US elections. The Committee had state last time that they are ready to use all available tools to support the US economy”. However, once again, the Irish Prime Minister tried to clear up the tensed air by stating that he believes a deal could be reached, but maybe on a “staged basis”, and that good results can be achieved in extra time. …

Today we have a busy day in terms of economic data releases. Given that today is the last full trading day in the US before the country goes on to celebrate Thanksgiving, we will be getting a lot of data, which could increase volatility significantly. Also, a few hours before the US data, the ECB will be delivering its Financial Stability Review.

ECB Financial Stability Review

The ECB will deliver its Financial Stability Review, in order show what it and other eurozone central banks think about the current state of the financial system. The report is aimed to promote awareness of the European financial industry and show the issues that surround it at the moment. In the previous review, which was delivered in May, the ECB stated that: “The spread of the coronavirus (COVID-19) triggered abrupt shifts in asset prices and led to an increase in financial system stress”. It also said that: “The coronavirus pandemic has affected virtually all aspects of economic activity, at times interacting with pre-existing financial vulnerabilities. Even if temporary, there will be a significant contraction in euro area economic activity this year”. …



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