America ushered in their 46th President as Wall Street welcome’s Joe Biden with record highs fuelled by prospects that looser fiscal expenditure will kick-start economic growth. In his inauguration speech Biden addressed the nation, focusing on unity and cooperation among fellow American’s juxtaposed by the 25,000 heavily geared troops guarding the ceremony. Despite gaining a majority on the Senate floor, it’s not all smooth sailing ahead. Various business leaders have vowed to lobby against planned corporate tax hikes, tight regulation and increases in federal minimum wage.
European benchmarks ended their session near intra-day highs as all eyes were on the U.S. The ECB will meet on Thursday, but no changes are expected given the expansion in bond-purchases since December. ECB President Christine Lagarde will more likely shift burden on towards governments and their fiscal policy to chart 2021’s course as fresh lockdowns impact recovery.
Asia-pacific indices pointed higher following overnight optimism. Australian job data helped bolster the S&P200 higher by 28 index points, whilst the unprecedented Mainland Chinese interest in Hong Kong stocks, saw the Hang Seng hit the 30,000 level. An estimated $27bn has been poured in the market via the stock connection since the start of the year. Though uncertainty still overshadow future US – China relations. Whilst the Biden is not expected to adopt Trumps’ hard-line approach to China, thus far the incoming administration has not signalled relaxing the existing sanctions. In final bout of tit-for-tat, China has sanctioned various out-going Trump officials including Secretary of State Mike Pompeo. Meanwhile the Nikkei edges higher after the BOJ revised their 2021 growth forecast higher noting enough stimulus has been delivered that will eventually offset the pandemic.
The U.S. dollar retreated among majors as the Treasury is set to light up the printing press. Crude ranges around $53 as investors balance between COVID restricting demand recovery and fiscal stimulus boosting economic activity. Gold rises $31 whilst bitcoin appears to find itself in a state of equilibrium as volatility subsides.
Despite a bank holiday, futures on Wall Street managed to etch out gains ahead of Janet Yellen’s confirmation hearing for Treasury Secretary in front of the Senate Finance Committee. Though Yellen will touch on topics of foreign exchange and taxes, the hearing is anticipated to act as a proxy forum for lawmakers to grill incoming President Joe Biden’s 1.9tn stimulus package.
European benchmarks regained momentum cheered on by better than expected GDP figures out of China. The quarterly rebound saw luxury goods stocks outperform as much of industry is dependent upon Chinese consumption.
With social restrictions to extend past January amid triple digit infection rates stifling Hong Kong’s economic recovery, the Hang Seng surged among Asia-Pacific indices posting 860 index point. Much of the move can be seen driven by inflows from Mainland China seeking value via the Stock Connect program. Thus far, Hong Kong stocks have boasted one of the lowest price-earning multiples across Asia, with Mainland counterparts 35% more expensive. Elsewhere, the S&P200 and Nikkei climb 49 and 315 points respectively. The state of Queensland in Australia is expected to lift restrictions, whilst miners led the board on increased electricity consumption in China, indicative of improving industrial activity.
The U.S. dollar index reaches a 1 month high amid a quiet market yesterday with the Turkey lira in focus. President Erdogan reiterated previous comments suggesting higher inflation accompanies higher interest rates. His comments put the newly placed central bank chief in a tough spot, of whom since taking the position, has raised benchmark rates to 17% from 8.25%. Meanwhile, crude fluctuates above $52, gold closes yesterday at 1,837 and bitcoin remains at 36,000.
Ahead of Joe Biden’s inauguration, global indices ended last week lower as uncertainty overshadow the ambitious 1.9tn stimulus package. The President-elect has promised, once officially in office will sign several executive orders overturning a raft of contentious policies implemented by Trump. Meanwhile, Democrats have become divided over the one-time stimulus check amount. Far-left purveyors have argued for another 2,000 whilst moderates voiced 1,400 is sufficient in topping up the 600 already passed in December.
COVID-19 still grabbed headline across Europe as benchmarks retreat. Ever escalating restriction’s have sowed the possibility of a double-dip recession, whilst the rate of inoculations has remained below expectations amid resurging cases. Mixed trial data for China’s Sinovac vaccine has delayed Hong Kong’s distribution. Nevertheless, the Hang Seng rallied 1.1% on open on the back of expectations beating GDP figures out of China. Australia points lower and a lack of action in the Japanese Nikkei.
Evidence mounts for a reversal in the U.S. dollar’s fortune with Janet Yellen set to be confirmed as Treasury Secretary. She is expected to give assurance the U.S. will not seek a weaker dollar for trade advantage and allow market forces to freely dictate direction. Elsewhere, early Asia session saw gold tumbling $23 dollars to 1,803 following a surprise announcement by the U.S. administration to revoke U.S. company export licenses of Huawei suppliers. Bitcoin loses steam, with the cryptocurrency back below 35,000.
Disappointing U.S. retail data worsened crude oil’s short-term outlook. Continuing surges in coronavirus infections still linger in the backdrop that could hinder global demand recovery. The decline could have been severe had it not been for Libya’s output reduction of 200,000 bpd after a leaking pipeline was discovered.
For the week ahead, central bankers in Canada (Wednesday), Europe (Thursday) and Turkey (Thursday) will deliberate on monetary policy. The ECB is expected to keep rates unchanged but communicate flexibility in expanding bond purchases should the pandemic worsen. Since hiking rates consecutively, Turkey’s new governor is set to make no adjustments but will monitor inflation closely.
Ahead of President-elect Joe Biden’s $1.9tn stimulus announcement, Wall Street diverges with the Russell’s index settling at record highs whilst large cap and tech retreated. Small businesses are anticipated to be the main beneficiary of a new wave of spending, including expanding jobless benefits and vaccinations programs on top of more direct payments to American households. Meanwhile out-going President Trump struggles to assemble a legal team ahead of his 2nd impeachment and uncertainty still cloud when the trial will begin.
European benchmarks managed to notch higher on brighter re-evaluations in the face of social lockdowns that’s stifling economic recovery. Alongside the large U.S. relief package, Chinese trade balance data not only exceeded expectations but now stands at historic highs. An encouraging sign, especially after the EU and China signing a trade deal earlier this week.
Elsewhere US – China relations continues to sour as the Trump administration in the their finals days is set to impose sanctions on smartphone maker Xiaomi and oil company CNOOC, citing security risk for the former and punishing the later for their involvement in disputed South China Sea waters. Though news initially flustered the Hang Seng on open, the indices regained ground intra-day hitting an 11-month high. Australian shares rose on the back of Biden’s unveiling whilst Japan took a breather, slipping 0.78% thus far. Nevertheless, following a strong start to 2021, the Nikkei is now just 5% from the 30,000 level. Investors are anticipating a bumper earnings season despite prevailing headwinds. An outbreak still uncontained, an Olympic in doubt and a plunging approval rating for Prime Minister Suga.
The U.S. dollar index fluctuates around the 90 level as elevated Treasury yields stave off risk-appetite for alternative currencies. Gold steadies at 1,850, crude hits 53.00 on demand recovery and bitcoin back at 40,000.
As Treasury yields pare off recent gains following consecutive days of strong auction demand for government debt. Wall Street’s unease settled with indices resuming their upward trajectory despite the U.S. house historically voting to impeach President Trump a second time. A single article of inciting insurrection has been approved however Senate Majority Leader McConnell signalled trial will not proceed until after Joe Biden’s inauguration, ensuring Trump serves his full presidency. Fed member Lael Brainard further reassured jitters yesterday that the central bank has no considerations to start tapering off its bond purchasing program this year.
European indices managed to notch higher after Francois Villeroy said the ECB will continue its super accommodative policies for as long as needed. Though investor mood is still mired by elevated COVID-19 daily infection rates prolonging social restrictions. Meanwhile, the U.K. was hit with most deaths in one day dragging the FTSE100 eleven index points lower.
One step forward, two steps back for the U.S. administration as they retracted plans to ban American investment in Chinese tech giants like Alibaba, Baidu and Tencent. Welcoming news for the Hang Seng, gapping 0.6% but lost ground throughout the session. Declassified documents revealed the U.S. had strategized in 2018 to counter China’s rising dominance via better relations with India and Taiwan. Elsewhere, Australia and Japan surge 0.5% and 1.8% fuelled by overnight rumours Biden is considering a further $2tn in relief aid. The BOJ also reaffirmed their readiness to expand monetary policy should the pandemic worsen.
The U.S. dollar index continue to rebound defying retreating yields, gold falls back below $1,850 and oil slips lower on profit taking. Despite bitcoin clawing back to 37,000 following a turbulent week, the spike in volatility has renew lingering doubts the cryptocurrency’s adoption as a mainstream asset.
Stretched valuations alongside rising Treasury yields temper irrational exuberance with Wall Street retreating from record highs. American politics started the week drumming up a 2nd impeachment for President Trump over citing insurrection against Capitol Hill. The Democratically controlled House have already introduced a resolution on Monday scheduled for a vote later in the week. Though Vice President Pence and Republican hardliners have strongly voiced against it.
Surging coronavirus cases induced exposure reduction across European benchmarks, especially among cyclical firms. Infections across the continent have topped 25 million whilst governments have upped the pace of vaccine rollouts in hopes stifle the new variant. London remains in tier 4 lockdown with the U.K. government mulling extra restrictions resulting in the FTSE100 falling 1.5%.
The S&P200 followed overnight U.S. sentiment, slipping 26 index points. A lack of short-term optimism has left the Australia benchmark in a 200-point range since the start of December last year. Meanwhile, both the Hang Seng and Nikkei surge intra-day. Imminent de-listings of Chinese firms in the U.S. market have re-directed investor capital towards the Hong Kong exchange, the most likely recipient of future China company listings. Drug makers in Japan kept optimism elevated following reports of successful vaccine trials.
The U.S. dollar post 4 consecutive days of gains. Higher U.S. yields have thus far deterred further exposure in risk-on currencies. Oil retraces but stays above $52, whilst gold fought back tumbling momentum from Monday. Bitcoin crashes 20% to $30,250 with few exchanges like Kraken triggering limit downs halting further declines. So far into Asia’s session, the cryptocurrency has recovered back to the $36,000 level.
Record highs again on Wall Street following President-elect Biden announcing plans for trillions more in further fiscal relief, including boosting stimulus checks to $2,000. Calling the $900bn bill signed last month by President Trump as a “down payment” whilst for his plans “the price tag will be high”. Meanwhile, the 10-year Treasury shot up to 1.12% as investor overhaul inflation expectations for 2021.
Likewise, the planned buffer for U.S. economic growth reverberated across European benchmarks boasting their best week in 2-months. Rising optimism from a U.S. Democratic Senate sweep and continuing vaccine rollouts saw the STOXX and DAX indices gain 0.7% and 0.6% respectively.
Asia-pacific indices opened Monday more cautiously as Australia fell 41 index points and Nikkei futures slips 235 points on a Japanese bank holiday. Defying expectations, the Hang Seng surged as high as 1.3% intraday, despite last week’s sell off in China’s telecom stocks following their removal from U.S. exchanges and plans by U.S. banks to delist approx. 500 structured HK investment products. Better growth prospects and 50 mainland funds expecting to launch in the coming months fueled the momentum.
The U.S. dollar index continues to rebound as investors temper their bearish bets as rising yields deter from alternative risk-on currencies. Elsewhere, crude takes a breather retreating below $52 whilst gold tumbles $64 down to $1,848. In focus, bitcoin experiences one of its worst Mondays, plunging 20% from historical highs of $41,989 to $33,745. Some $170 bn has been wiped off the cryptocurrencies market cap as analyst largely attribute the decline to whale’s profit-taking.
Despite growing calls to remove out-going President Trump as many believe his rhetoric instigated violence at Capitol Hill. Wall Street extends to all-time highs as prospects for more short-term stimulus outweigh risk of tougher business regulations and higher taxes. Both House Speaker Pelosi and Senate Democratic leader Schumer have insisted Vice-President Pence to invoke the 25th amendment and remove Trump from office immediately.
Meanwhile, European indices climbed two consecutive days in a row, with Spain outperforming posting gains of 3.3%. Defying lockdown measures, a string of positive news from better than expected German factory orders to European approval for Moderna’s second COVID-19 vaccine have boosted overall investor confidence.
Coming into Asia, the Hang Seng continues to defy expectations rallying to an 11-month high amid a dire outlook for Chinese companies on Wall Street. Both MSCI and FTSE Russell have confirmed they will delete three China telecom companies from their global indexes. Elsewhere, Australia is poised to break out of a 2-month consolidation, where as Japan rallies for 3 days in a row whilst a state of emergency has been declared in Tokyo.
Reprieve for the U.S. dollar following a bounce back from 3-year lows for the index. The Greenbacks turn around came alongside rising Treasury yields and inflation expectations with St. Louis Fed President Bullard commenting once the impact of vaccine reverberates across the states, “you have the economy poised to boom at the end of the pandemic”. Among exotic’s the South African Rand is emerging as the biggest loser thus far in 2021 with the USDZAR weakening to 15.40. The country reported a record 21,832 in new daily cases, culminating from the more infectious variant. Outflow’s have been intensifying amid a government contemplating nationwide lockdown.
Elsewhere, crude oil briefly hits $51, gold back down to 1,910 and bitcoin’s rollercoaster ride continues, temporarily passing 40K followed by a $3,500 tumble then back up to 39K again.
Pro-Trump supporters storm Capitol Hill in an attempt to block Congress from certifying Biden’s presidency following a decisive win for Democrats in Georgia’s run-off election. Both Jon Ossoff and Raphael Warnock’s victory ensures the Senate floor is now split 50-50 leaving Vice President-elect Kamala Harris as the tiebreaker. The S&P500 and Dow Jones relished the news both gaining 0.9% and 1.6% respectively on the prospect a top-up stimulus package is on horizon for American households. Meanwhile the Nasdaq underperform as investors fret over uncertainty if Democrats would impose harsher non-business friendly tech policies.
Despite lockdown, economically sensitive stocks boosted European benchmarks higher after Moderna’s vaccine won regulatory approval from the European Medicine Authority and the European Commission. Investors were also optimistic over better trade ties with the U.S. as the Democrats are on the cusp of gaining majority power.
Asia-pacific indices advanced higher, set to continue overnight U.S. momentum with the S&P200 and Nikkei climbing defying peripheral risk. The Japanese PM Suga is set to declare a state of emergency today for the Tokyo region, expected to decrease 0.7% of GDP for each month it’s implemented. Whilst the declaration does not impose lockdowns, authorities can close or limit business operations as well as urge residents to stay home. The Hang Seng continues to rise despite increasing hostility from U.S. officials in expanding the Wall Street backlist. The most recent rumours surround payment apps Alibaba and Tencent as the NYSE announced they will delist the ADR of China Mobile, China Telecom and China Unicorn prior to open on Monday 11th Jan.
Sentiment remains bearish on the U.S. dollar as it fluctuates at lows. Majors across are the board are hitting levels unseen for years. The Aussie nears 0.78, the Euro closes above 1.23 and the Yen at 103. Exotics paint a similar picture with the TRY and MXN breaking multi-month highs. Elsewhere, crude hits $51 today, gold tumbles whilst bitcoin achieves’ a literal vertical trajectory upwards approaching $38,000.
Wall Street tempers Monday’s losses as the U.S. Senate majority hangs in the balance on Georgia’s run-off election. Early results show Democrats in front by a 7-point margin with the gap expected to slim down razor thin. Whether President-elect Joe Biden’s presidency will be a lame duck for the next four years hinges upon Tuesday nights results.
Elsewhere, European counterparts remain on edge amid a volatile session despite closing relatively unchanged from yesterday’s close. The FTSE shrugged off the latest lockdown woes on the back of oil majors surging from OPEC’s meeting.
With Georgia’s vote counting still on-going, Asia-pacific indices tumbled with the S&P200 the worst performer, down 70 index points thus far. The 1% decline on the Hang Seng was further exacerbated by the NYSE’s 360 rotation back in favour of delisting three Chinese state-run telecom groups again. The exchange’s initial backflip drew fury among Treasury Secretary Steven Mnuchin and the Trump administration. Meanwhile, the Japanese Nikkei slips 0.38%.
The U.S. dollar continues to debase, hitting its lowest point since February 2018 among majors. Investors remain weary of the Thai baht’s recent appreciation following a hawkish tone from the Thailand’s central bank whilst a new coronavirus wave is set to impact economic projections. Authorities in China signalled their appetite for a strong yuan however discouraged a freefall in USDCNH as they set the fixing slightly higher at 6.4604.
Gold trades at an 8-week high at 1,950 on ever increasing inflation expectations whilst bitcoin recovers entirely from Monday’s crash. Oil prices just a tad shy from $50 after surging to a 10-month high as Saudi Arabia pledges to cut enough output to offset production increases from Russia and Kazakhstan.
Volatile start for 2021 as Wall Street tumbled with the VIX index gaining 18% on Monday over rising global uncertainty. Investors wrangled with a conflicting political environment ahead of Georgia’s Senate run-off. A Democrat’s win would almost certainly ensure greater U.S. fiscal stimulus but at the expense of higher taxes for the wealthy and less business-friendly regulatory reform. Alternatively, if Republican’s retain majority, the recently passed bill would most likely be all the relief American households would receive. Meanwhile, U.S. deaths top 354K and the new faster spreading variant risks boosting infections tempering optimism.
European markets followed suit, failing to sustain momentum fuelled by vaccination campaigns and the landmark Brexit trade deal. The STOXX and CAC slipped, whilst the DAX was rejected from closing at all-time highs. The FTSE fared better surging as high 6,666 intra-day but settled for 6,552 at sessions end despite a new national-wide lockdown. The U.K also began administering the Oxford/AstraZeneca vaccine on Monday and is expected to increase the pace of shots in Q1 in hopes to combat the fast-spreading variant.
Mixed price action in Asia, with Australia recovering overnight losses, Japan relatively unchanged and Hong Kong gaining 180 index points following a backflip from the NYSE in delisting Chinese oil firms.
Alongside rising risk, the U.S. dollar index regain some ground as investors began rotating back to risk-off assets. The pound was among the worst performers as bad new piles on. Gold soared $48 to a 2-month high whilst bitcoin plummets from 33,600 to 27,900 and ultimately closing at 30,000 following New Year. Elsewhere, crude falls back around $47 after OPEC+ reached a deadlock with Russia proposing an increase in production on grounds that demand has rebounded.
Wall Street ends 2020 settling at record highs after a turbulent year which saw the Dow Jones lose as much as 38% between February and March. Following March lows, Nasdaq was among the better performers posting gains of 93% as investors shift focus from cyclical stocks to innovative stay-at-home tech firms set to benefit from a global virus pandemic. It is not all smooth sailing coming into 2021. With a newly elected U.S. President and Georgia’s 2 senate seat run-off at stake. The winner of the run-off will determine whether Republicans or Democrats take Senate majority, dictating economic policy for the next four years.
Elsewhere, European and UK indices suffered consecutive days of declines amid a resilient virus and stricter measures set to devastate economies across continents. Alongside delaying the opening of schools, PM Boris Johnson is contemplating tightening restrictions. Meanwhile, Germany will extend national wide lockdown till end of January and France implemented a nightly curfew. The pace of vaccinations has been overly cautious, and nations are expected to pick up the pace in the new year.
Mixed start to 2021 for Asia-Pacific indices. The Japanese Nikkei tumbled 640 index points intra-day following an announcement by PM Suga to start vaccinations by the end of February. The market was expecting the PM to declare a COVID-19 emergency in the coming days but only to be disappointed. Despite, delisting threats for Chinese oil companies on the New York Stock Exchange, the Hang Seng rose 310 points, whilst Australia climbed 78 points defying gloomy sentiment as Sydney imposed stricter social measures yesterday amid a 3rd wave outbreak. In an attempt to dampen the economic impact from the growing Australia – China trade war, PM Scott Morrison is moving to strengthen trade ties with smaller island in the Pacific Ocean in exchanging their neighbors with COVID-19 vaccines.
The American greenback retains its downward trajectory in the new year as majors set break away to new multi-year highs. Gold breaches back above 1,900 in anticipation of higher inflationary pressure resulting from U.S. stimulus. Ahead of OPEC’s meeting today, crude oil rises for four consecutive days to $49 expecting a delay in raising output in February as surging coronavirus infections engulf developed economies.
On the cryptocurrency front, bitcoin relentless soars to record highs of $34,782 during the holiday break. The 206% meteoric rise initially fueled by PayPal’s integration into their payment services back in October 2020, has seen the digital coin gain populous acceptance as a mainstream alternative payment method.
Ahead of New Year’s Eve, global investors began winding down exposure as broad-based benchmarks ended in bear territory albeit with some stragglers on Wednesday. Wall Street was disappointed as Senate Majority Leader McConnell positioned the $2,000 stimulus payment alongside measures on election integrity and social media liability protections. The packaged deal addresses President Trump’s 3 most vocal demands whilst deterring Senators from both congressional sides in unanimously voting for the bill. The most likely outcome would leave the bill dead in the Senate floor.
Despite positive momentum on the vaccination front and the U.K. parliament overwhelmingly voting in favour of the Brexit deal, the FTSE fell 80 index points with European counterparts following suit. Brits rejoiced following local approval of AstraZeneca’s COVID-19 vaccine whilst China’s President and European leaders met to finalise an EU-China investment agreement designed to promote post-pandemic economic recovery in bi-lateral trade. Elsewhere, on-going trade dispute between EU-US saw the out-going administration slap additional tariffs on European Union products including aircraft component and wine.
Asia followed overnight U.S. sentiment posting declines in Australia whilst action in Hong Kong and Japan remained muted. Authorities in Sydney and Melbourne area struggling to battle COVID-19 clusters across both states after an initial outbreak on the Northern Beaches have now grown to 144 people.
The U.S. dollar index settled at a 2 and a half year low yesterday. Since the pandemic began back in March, the year of 2020 saw investors shun the greenback as a Federal Reserve’s commitment to being super-accommodative and loose fiscal policy debase the currency. Meanwhile, gold surges towards $1,900, crude stays above $48 and bitcoin breaks all times highs again briefly touching 29,000.
Market jitters return as Republicans block Democrats attempt to increase direct payments to households from $600 to $2,000. Defying the out-going President, Senate Majority Leader McConnell not only put the vote off, but also challenged Trump’s veto of the defense bill and pleaded towards his fellow Republicans to override his decision.
Upon U.S. session open, Nasdaq held its ground whilst Wall Street across the board took a nosedive ending lower on Tuesday. President-elect Biden had criticised the current administration’s vaccination campaign as slow, vowing to get 100 million American’s vaccinated within 100 days of his presidency.
Across the Atlantic, U.S contagion spread across European benchmark, of whom initially extended post-Brexit deal rallies only to lose all intra-day gains. Likewise, following Boxing Day, the FTSE had gapped up 1%, and surged as high as 2.6% only to end at 1.2% by session end.
Asia opened mixed as Australia and Japan oscillated whilst Hang Seng surged to multi-month highs, up 1.7%. Panic selling in China’s tech sector after Beijing’s recent anti-trust probe spurred investors hunting for alternative value in Hong Kong.
The U.S. dollar continues to slump shrugging off stimulus concern within the political arena. The Aussie dollar reached a 30-month high, the Turkish lira post 3 consecutive days of gain and China yuan’s just pips away from 6.5. Elsewhere, bitcoin rallies back up to 28,000 and crude settles around $48.
US President Donald Trump decided to sign the massive $2.3 trillion coronavirus relief. Trump’s signature of the $900 billion coronavirus relief package extends unemployment benefits for millions of unemployment workers and independent contractors. The US dollar index fluctuated and fell. It was a quiet trading day on Monday as many investors were on vacation for Christmas and New Year. The US dollar index fell slightly to 90.30, a decrease of 0.06%. The intraday highest touched 90.38 and the lowest touched 89.98. Spot gold fluctuated after a sharp rise of 1.3%. Spot gold closed at US$1873.54, down US$5.71 or 0.30%. The lowest intraday touched US$1868.96 and the highest intraday US$1900.19.
Due to the massive coronavirus relief and government spending bill with a total value of 2.3 trillion U.S. dollars, and the market is optimistic about economic recovery. The three major U.S. stock indexes continued to rise by 0.7%-0.9% after the Christmas holiday last night, setting record highs. The Dow once rose 325 points or 1.1% to 30,525. US stock futures continued to rise by 0.2%-0.3% across the board. The major stock markets in the Asia-Pacific region performed well in the early stage. The Nikkei and New York stocks continued to rise by more than 1% after the long holiday. They reached 29 and a half year highs and repeated record highs respectively. The former has reached 27,239 immediate market highs and surged 385 Point or 1.4%. Taiwan stocks have also repeatedly set record highs.
Cryptocurrency exchange Coinbase announced that as the U.S. Securities and Exchange Commission (SEC) sued the Ripple (XRP) issuer Ripple for an unregistered securities issuance of US$1.3 billion, it has imposed restrictions on the trading of Ripple and will start trading on January 19. Trading was completely suspended at 10 am on the same day. Coinbase has 35 million users in more than 100 countries and regions. The company has secretly applied to the SEC for listing. This will be the first major cryptocurrency exchange to be listed in the United States.
Christmas ends on a positive note as lingering uncertainties for 2020 finds a clearer path forward. Under immense pressure from congressional parties, Monday saw President Trump sign to action the 900bn stimulus package. Alongside relief for American households, the legislation further averted a partial government shutdown on Tuesday by releasing 1.4tn in spending to fund federal agencies. Overnight futures on Wall Street rejoiced as all board-based benchmarks surge towards all-time highs.
With a historic Brexit trade agreement signed on Christmas eve, Downing Street released a 1,246-page text of the deal on Saturday just five days before the U.K. exits one of the worlds’ significant trading bloc. The FTSE100’s response was relatively mute whilst the STOXX and DAX rose 1.17% and 1.52% respectively. Investor sentiment received a further boost as Europe implemented a coordinated vaccination campaign following regulatory roll-out for Pfizer-BioNTech’s vaccine shot with AstraZeneca expected to obtain their medical approval later this week.
As China’s crackdown on monopolistic practices accused from fintech goliaths Ant Group and Alibaba, the Hang Seng bucked the negative mood surging to an intra-day high of 26,541. Likewise, the Japanese Nikkei followed suit fueled by a quicken global economic recovery as the world begins inoculations and U.S. injects cash.
On thinly traded liquidity, bitcoin received a Christmas bump to record highs at 28,353 on Sunday after closing at 23,718 last Thursday. Nevertheless, the 20% move could not be sustained, and the cryptocurrency retreated down to 27,000. Bitcoin’s recent rise back to prominence came alongside greater vocal institutional interest. From payment services like Pay Pal to asset managers like Paul Tudor Jones endorsing the digital currency.
Elsewhere, the U.S. dollar continues to debase across the board as the Treasury mints more cash. In anticipation of a weaker dollar, China lifts its yuan’s mid-point to 6.5236, a 30-month high. Gold is higher by $14 as markets re-evaluate future inflation levels whilst crude stays above $48 as an optimistic economic recovery out weights risk of recent travel restrictions.
Ahead of Christmas, European broad-based benchmarks outperformed American counterparts on Wednesday upon clear signs a Brexit trade deal is imminent. As negotiations come down to wire, the European Commission has said they’re now in the “final stages” after fine-tuning fishing right details. One last eleventh hour issue remains and that is trading rules for electric vehicles. Downing Street has requested U.K. electric cars to be tariff free if most of the components were outsourced beyond EU and UK territories.
Across the Atlantic, U.S. households were left in limbo following Trumps refusal to sign the 900bn coronavirus relief deal. Some House Republicans have called the bill tainted and supported the White House proposal to increase stimulus checks from $600 to $2,000. With unemployment benefits set to expire the day after Christmas, congressional Republican party is scrambling to find a compromise. The uncertainty President Trump injected left Wall Street mixed. Nasdaq ended the session lower by 48 points whilst the Dow Jones outperformed by 171 points followed by the S&P500. Concerns have also risen over the pace in which vaccine doses have been disseminated. Millions of injections are still in storage and the goal of vaccinating 20 million people by December end is in doubt.
Despite authorities in China launching an investigation on Alibaba’s monopolistic practices, the Hang Seng managed to etch out 0.3% intra-day. Elsewhere, disappointing performance from the S&P200 and the Japanese Nikkei had price in negative territory.
The U.S. dollar resumed declines with the pound outperforming, surging as high as 213 pips amid increasing probability of a Brexit deal. Expectation beating GDP figures saw the Canadian Loonie reversed Tuesday’s losses in its entirety. Meanwhile, crude oil gains just over $1.10 over inventory drawdowns, gold steadies itself at $1,872 and bitcoin takes a breather, fluctuating between two major psychological round numbers. $23,000 – $24,000.
Fresh jitters crept into Wall Street as out-going U.S. President Trump signalled he may not sign the congressionally approved 900bn COVID relief bill. A four-minute video posted on Twitter called the 5,600-page legislation a disgrace and that he would ask congress to amend the to “increase the ridiculously low $600 to $2,000 or $4,000 for a couple”. Both the S&P500 and Dow Jones edged lower by the end of session, whilst Nasdaq outperformed relatively as lingering concerns over the coronavirus variant had investors still favouring stay-at-home stocks.
Meanwhile, defying daily infections hovering above the 30K mark, new tier 4 restrictions in south-east England and intensifying Brexit talks, the FTSE100 stabilised up 0.4% on Tuesday. Germany’s BioNTech alleviated concerns over the new strain suggesting existing vaccines are just as effective and if necessary, a new vaccine could be developed within 6-weeks. Despite prospects of negotiations continuing after Christmas, both Boris Johnson and Ursula von der Leyen stressed a desire to close a deal by Wednesday night. Fishing rights remain a key point of contention. Elsewhere, broader European indices outperformed settling near intra-day highs following Monday’s scare.
Coming into Asia, choppy start for indices. The S&P200 gapped up 0.24% on open after finding support at 6,600, Hong Kong suffered a 0.37% gap down only to recover its entirety mid-session, while the Nikkei slipped following cumulative infections topping 200K and PM Suga’s reluctance to declare a state of emergency.
Resurging fragments of uncertainty fuelled U.S. dollar demand across the board. As expected, frets over Brexit saw the euro and pound underperform amongst majors, with the former depreciating 0.6% whilst the latter down 0.8%. In the meantime, China’s central bank is anticipated to reduce the dollar’s influence against it’s yuan basket. Ahead of Bank of Thailand’s policy decision, the Thai Baht loses 1.4% in 2-days as rates are expected to stay at 0.5%. Crude oil slips another dollar to $46.62 as global restriction hamper petroleum demand. Whilst gold retreats, bitcoin surges closer to $24,000 on the back of unrelenting institutional demand.
European markets and US market open in the heavy selloff on worries over a new strain of coronavirus found in the UK. Some other countries also have such cases, including Australia, Iceland, Italy, the Netherlands and Denmark.
The WHO held a press conference for the new coronavirus. WHO said that countries have started virus sequencing to find cases infected with the new crown virus variant found in the UK. The current data reported by the United Kingdom shows that the spread of this new coronavirus variant has increased, with the transmission index rising from 1.1 to 1.5. The UK is determining how much of the impact comes from the virus itself and the differences in individual behavior after infection with this new virus.
US crude oil drops sharply from around 49 to the lowest 46.1 during the day. following the risk aversion of the market. The new COVID-19 mutation and stricter lockdown the concern that more parts of the world may have renewed restrictions. US crude oil has increased for more than 30% since November as a sequence of vaccine breakthrough, but signs of stricter restrictions may lead to a decline of oil prices and weakening forward curve.
The U.S. Congress began to consider more than US$900 billion to stimulate the economy, and the program was the first to be debated in the House of Representatives by 227 to 180 votes. The plan will include distributing US$600 to each American citizen and continuing to provide subsidies to the unemployed. At the same time, it will increase credit to SMEs by US$284 billion, and provide financial support to schools, airlines, transportation systems and vaccine distribution. The plan and the 1.4 trillion US dollar annual budget will be delivered for debate and voting. The review of the stimulus plan and the budget is expected to be the last item on the agenda before the end of the congressional term on January 3 next year.
Mixed session in Asian trading with futures across Wall Street pointing lower as markets were spooked over emerging evidence revealing a new coronavirus strain sweeping across Europe and Australia. The new variant is said to spread more quickly and has been a factor in driving the recent surge in infection.
In Asia, the S&P200 oscillated but remained unchanged, the Nikkei tumbling 1.7% and Hang Seng gapping lower 0.4% only to regain the entirely in later session. Currencies across the board against the U.S. dollar tumbled as risk appetite was sapped with more global lockdowns and restrictions on the horizon. The move was further exacerbated with investors fearing the incoming Treasury Secretary would favour a strong dollar policy after two predecessors, Larry Summers and Paul Hankson urged Janet Yellen to manage the greenbacks global dominance role more prudently.
With focus on COVID, the much-anticipated stimulus reformed announced Monday morning failed to buoy investor sentiment. Whilst the Japanese parliament signed on a record 106.6 trn yen annual budget for 2021 boosting military and welfare expenditure. Congressional leaders in the U.S have reached a $900bn relief package after multiple rounds of negotiations in past weeks. Hard-hit households would receive a one-off $600 check in addition to another $300 per week in unemployment benefits. COVID liability shield remains a point of contention and thus was excluded.
Last Friday saw European and UK benchmarks weaker as Brexit negotiations drag on. A draft deal had been anticipated before January 1st, however progress thus far suggest talks will now continue past Christmas. The previously resolved fishing matters have returned to the forefront with negotiator arguing over EU boat rights in UK waters and the length of the transition period.
Elsewhere, crude oil slips below $48 with demand recovery now in doubt. Gold and bitcoin continue to make significant gains, more so the latter asset. The cryptocurrency gained 32% last week as more prominent investors publicly embraced the digital coin. This morning the crypto gained another $1,000 on the back of Elon Musk’s twit pondering converting part of Tesla’s balance sheet into Bitcoin.
The US dollar fell to its lowest level in more than two years against major currencies on Thursday. The Fed’s reassurance to its current policy stance also boosted the interest of high-risk currencies after more stimulus measures from the US and a trade agreement. According to members of Congress, they are close to reaching an agreement to provide US$900 billion in aid to the American, which has boosted market sentiment. Before federal funding expired at 12:01 AM Eastern Time on Saturday, lawmakers had little time to pass a government funding and pandemic relief plan.
US Dollar Index has dropped nearly 13%, from 102.82 to 89.9, since March, when it spiked to a three-year high as the coronavirus pandemic plunged the US. The economy was into recession, driving investors into more safety currency in the world. USDJPY dropped to as low as 102.9 today.
The rise of Bitcoin, the world’s most well-known cryptocurrency, is supported by the needs of larger investors, who have been Attracted by earnings potential and inflation hedging characteristics.
Technology stocks pushed the S&P 500 and Nasdaq to record highs on Thursday as the market’s optimism over the coronavirus stimulus rose, which ignored the signs of economic pressure brought about from the coronavirus pandemic.
The U.S. prepares to ship 5.9 million doses of coronavirus vaccine on Thursday. At the same time, the U.S. recorded the highest single-day death cases of 3580 from coronavirus.
The value of Bitcoin, the world’s well-known cryptocurrency, has reached $21,800, hitting a new high with an increase of 11.9%. The price of Bitcoin has already surged by more than 400% this year from a low point of around $4500 in March. As some of the biggest institutions in the world, including big companies in Wall Street and multinational payment companies, are more into cryptocurrency, bringing with their capital and expertise, this may make consumer interest in it. In addition, the coronavirus pandemic and the need for safe-haven global monetary policy opening and releasing are also important point of Bitcoin's recent surge. It is reported that 63% of Bitcoin investors surveyed stated that their decision to invest in Bitcoin was affected by the coronavirus pandemic. Bitcoin seems to have something in common with safe-haven assets, such as scarcity, not much correlation with traditional financial markets.
The U.S. Federal Reserve announced to maintain close to zero interest rates unchanged. The Federal Reserve said it will buy at least $120 billion in bonds every month. The Federal Reserve said, “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The Dow closed at 30,154 points, down 44 points (0.1%); the S&P 500 index reported at 3701 points, up 6 points (0.2%); the Nasdaq closed at 12,658 points, up 63 points (0.5%).
Flash PMIs in Europe this month showed the economy far exceeded expectations, with manufacturers reporting strong growth by performance from German, French and UK. However, German’s largest economy was in a stricter lockdown again.
Ahead of Wednesday’s final Federal Reserve meeting for 2020, Wall Street positions itself higher in anticipation of adjustments on bond purchases and pressure from Fed Chair Powell nudging the Senate towards a stimulus deal before the congressional session winds down this Friday. Two partisan issues have left progress on a new relief package moving at snail’s pace. A slimmed-down $748bn proposal has been introduced that separated out COVID liability shield and local aid in hopes to push through a last-minute deal. House Speaker Pelosi and Senate Majority leader McConnell are due to meet Tuesday evening, with the later previous floating a similar trim separated deal.
Vaccination drive in Europe shook off rising infection woes and lifted European indices into positive territory. Despite plans from euro zone members to tighten restrictions before the new year, investors have narrowed their focus on vaccine optimism with the EU expected to approve a COVID-19 vaccine by January. Meanwhile, the FTSE advanced with Brexit talks moving forward on fishing rights. Downing Street has conceded the point that fishing vessels under a U.K. flag needs to be majority British owned.
Overnight momentum from the U.S. session carried the S&P200 higher in Asia, however the benchmark lost all intra-day gains following an update with the WTO moving forward on Australia’s challenge on Chinas’ barley tariffs. Elsewhere, the Nikkei retreated and so too did the Hang Seng. Chinas’ antitrust crackdown from fines levied to probes soured investor sentiment in fear of Beijing tightening its’ grip over prominent tech firms.
Positive steps towards stimulus, vaccine roll out and even Brexit saw outflow in the U.S. dollar in search for higher yielding currencies. The CAD closed at a multi-year record whilst AUD, EUR and GBP settled for multi-month highs. Mexico’s peso reversed previous days losses after the government pulled back a bill that would force the central government to purchase foreign currency, of which could potentially be originated from laundered activity. Alongside a steady appreciate in the yuan, China’s leaders are expected to convene this week to plan out economic goals for 2021. Loose policy to combat a virus pandemic saw China exhibit a v-shaped recovery and in turn major capital inflows. Elsewhere, gold and crude advances whilst bitcoin is about to break historic levels again.
Harsher restriction across Europe is souring investor mood ahead of Christmas. Monday open saw European futures buoyed by an extension in Brexits’ negotiation deadline, only to have indices retreat lower by session end. Non-essential shops, services and schools will close until January with gatherings reduced to 5 people from 10. Likewise, The Dutch PM announced the Netherlands will start a five-week nationwide shutdown starting today. Depending upon neighbouring countries Ireland may reimpose piecemeal COVID-19 restrictions in January.
Meanwhile, the FTSE100 fell 48 points after the mayor of London placed the city under tier 3 coronavirus restrictions from Wednesday. The pound though ended Monday in bear territory still retained its appreciation (up 97 pips) from last Friday close due to the opening gap up.
Across the pond, cyclical stocks suffered dragging both the Dow and S&P500 lower whilst Nasdaq outperformed. Despite the first U.S. vaccination being administered yesterday, investors are re-evaluating their bullish optimism over distribution hurdles slowing down national wide roll out. On the stimulus front, a bipartisan group of Senators presented a drastically reduced stimulus bill amounting to only $748bn (from $908bn) in hopes to compromise the differences between Senate Majority leader McConnell and House Speaker Pelosi. Reception on Capitol Hill was mixed.
Asia open was weighed down by market risk of their own. The Nikkei edged lower following Japanese PM Suga suspending his governments domestic tourism promotion campaign over rising infections. The government had hoped to revitalise domestic growth via a travel subsidy programmed dubbed “Go To Travel”. Alongside the S&P200’s 32-point loss, the Hang Seng too declined 267 points over Australia and China’s increasing geopolitical spat. In retaliation for China banning coal imports from Australia, the Aussies are taking Beijing to the WTO over barley export tariffs and government subsidies creating unbalanced markets.
As Joe Biden was formally confirmed as the next U.S. president by the electoral college, the greenback traded at 2.5-year lows against a basket of peers. Elsewhere, China’s yuan oscillates above 6.50 in anticipation of the central bank flooding the financial system with 800bn yuan in funding. The communist party had begun tapering fiscal stimulus but has set off a string of corporate defaults. Crude oil holds firm below $47 defying a recent OPEC report revealing a downward revision in global demand for 2021.
Brexit negotiations given another lifeline as UK PM Boris Johnson and EC President Ursula von der Leyen agreed to extend talks beyond Sundays’ deadline. EU Representative von der Leyen said “Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over, we think it is responsible at this point to go the extra mile.”
The pound gapped 130 pips higher along with broad-based benchmarks in Australia, Hong Kong and Japan. Whilst the latter two lost ground throughout Asia’s session, the S&P200 retained gains intraday, rallying as high as 1.1%. Global futures also pointed higher as the first batch of Pfizer-BioNTech vaccines were due to be delivered in the U.S. on Monday.
Friday close saw Wall Street steady itself ahead of a risk-filled weekend whilst European and British investors offloaded exposure ahead of Brexit’s deadline. Though Democrats and Republicans have agreed on a ballpark figure to implement a 908bn stimulus package, differences still lie in how the bill should be structured. Senate Majority Leader McConnell has been willing to concede business liability protection against COVID-19 in exchange for dropping a supplementary $300 employment benefit for jobless American’s. A point House Speaker Pelosi has refused to give in.
The U.S. dollar resumed its depreciation among majors on Monday open as weekend risk subsides. Oil set to point higher on the back of a 6-week rally. Alongside vaccine prospects, OPEC+JMMC’s decision to delay production increase eased any crude jitters. Compared to bitcoin which open above 19,000 from 18,000 last Friday, gold has remained docile above the 1,830 level.
For the week ahead, the FED (Thursday), SNB (Thursday), BOE (Thursday) and BOJ (Friday) will deliberate in their final monetary policy meeting for 2020. The FED is expected to clarifying guidance surrounding the emergency bond-buying program whilst the BOE’s decision is at the mercy of Brexit trade talks. If negotiations deteriorate further, a cut to zero is anticipated. Meanwhile, no changes expected from the SNB and BOJ.
After the much worse than expected unemployment claims data in the United States, dollar falls in early US session, reflecting the impact of current coronavirus pandemic. Pound fell as the possibility of Brexit increased. Euro increased after European Central Bank made the expansion and extension of Pandemic Emergency Purchase Programme (PEPP) as expected.
The number of people claiming unemployment benefits for the first time in the United States for the week ended December 5 jumped by 137,000, compared with the previous drop of 71,000, to a total of 853,000, the highest since September, which was far more than market expectations. It rose to a total of 725,000, reflecting that the expansion of business closures under the pandemic has led to a new round of job losses. It is unlikely that the United States will introduce a new round of fiscal stimulus in the short term. Earlier, House Speaker Democrat Pelosi suggested that the debate over spending plans and aid for the new crown virus may continue until Christmas.
The Australian Dollar has surged more than 1.3% against the US Dollar since the start of the week. AUD/USD advances above 0.756, highest since June 2018. The month high marks the biggest rise in five weeks.
Wall Street revaluates stimulus before January retreating from record highs, with the Nasdaq underperforming 2.4% as congressional talks hit a brick wall. The administrations $916bn counterproposal had received a frosty reception from House Speaker Pelosi and top Democrat Chuck Schumer. Despite attempts by Senate Majority leader McConnell in conceding demands for protection to shield businesses from COVID related liabilities, Democrats find the new bills’ reduction in jobless benefits unacceptable.
Across the pond, the E.U. and U.K. deal with political wrangling of their own. Drastic deterioration in Brexit negotiations this week saw PM Boris Johnson personally fly to Brussels only to be stone-walled by EU heavyweights whom signalled they’re prepared to accept a no-deal outcome. Though the pound initially slipped 70 pips, the FTSE remained unchanged illustrating a clear divergence between the current state of Brexit talks and investor anticipation of a last-hour deal. Both sides have agreed to give till Sunday before negotiations are dead. Meanwhile, European indices slip from multi-month highs ahead of the ECB meeting on Thursday.
With the overall global mood overshadowed by U.S. stimulus and Brexit, Australia and Hong Kong saw modest intra-day declines whilst Japan inched higher following the release of better than expected manufacturing data.
Increasing uncertainty saw a return in U.S. dollar demand whilst gold loses 1.6%. Though the Aussie moved against the grain to a 2 and a half year high, despite rising AU – China tensions. Chinese demand for Australian iron ore remains strong, especially as the East recovers economically. Historically, AUDUSD would appreciate alongside commodity prices. Elsewhere, a tourism snag brought the Singaporean dollar’s rise to a halt. A return to normalcy had the currency break a 2-year high on prospects that tourism would open back up only to be derailed by a COVID-19 infested cruise ship just off the country’s shores. Following OPEC, oil fluctuates around $45.50 despite yesterday’s inventory revealing a dramatic surplus at 15.2mn.
Alongside Wall Street breaking into new highs, global indices across the board posted positive gains on Tuesday unphased by stalling U.S. stimulus and Brexit talks which continues to overshadow general sentiment.
Nevertheless, the world’s first approved coronavirus vaccination kept investor morale high. On Tuesday, thousands of elderly Brits were recipients of Pfizer/BioNTech vaccine outside clinical trials. American’s are also expected their first dose within 10 days as regulators grant emergency approval.
Despite Democrats compromising a multi-trillion-dollar package for a 908bn deal, Senate Majority Leader McConnell has refused to endorse the bipartisan proposal but instead opted for his own 916bn plan. The major different lies in protection for businesses against COVID-19 related lawsuits.
Though investors were caught off guard from last Sunday’s sudden deterioration in negotiations. The pound steadies around 1.34, with intra-day volatility remaining high. Meanwhile, the FTSE up 0.8% ahead of U.K. PM Boris Johnson meeting ECP Ursula von der Leyen in Brussels today for last ditch effort. European benchmarks also followed suite in anticipation of a Brexit deal.
Markets across Asia-Pacific rallied on open with Australia extending gains to a new 9-month high. Exceptional machinery orders saw the Japanese Nikkei elevate 310 points whilst Hong Kong reversed Tuesday’s losses by 0.78%.
The U.S. dollar index steadied just below 91 resulting from lacklustre macroeconomic news. Elsewhere, gold continued its hot streak closing above 1,870 whilst bitcoin fell below 19,000.
Among global benchmarks, Nasdaq outperformed as investors retreated to tech firms benefiting from COVID-19’s continual surge. Despite promising headway yesterday in breaking congressional deadlock on a $908bn stimulus proposal, both S&P500 and Dow failed to keep record-breaking momentum slipping 0.27% and 0.54% respectively. Wall Street was further weighed down on reports that U.S. officials passed up a chance to secure more vaccine shots from Pfizer in favour of diversifying agreements with Moderna, AstraZeneca and Johnson and Johnson. The current Pfizer deal is enough for only 50 million Americans among a 328 million population.
Though the pound regained loss ground from Monday’s intraday tumble following Prime Minister Johnson signalling his willingness to walk away on threats to break Brexit’s divorce agreement. Euro-zone benchmarks still fell on on-going Brexit woes and rising risk from U.S. – China tensions. Subsequently after Monday’s deadlocked negotiations, the U.K. PM is expected to travel to Brussels to meet with EU leaders for a make-or-break talk.
Asia fails to build on momentum from last week’s vaccine and U.S. stimulus induced rally that edged Wall Street to fresh highs on Friday close. Indices retreated into negative territory on open with Australia lower by 17 points overshadowed by rising Chinese trade tensions. Government forecaster Abares expects agricultural exports to decline 7% in 2021 hitting a 5-year low. Meanwhile, the Hang Seng tumbled 2% following reports that the White House will sanction another dozen Beijing officials over their coordination in expelling opposition legislators in Hong Kong’s parliament. The Nikkei did not fare any better, slipping 1.2% after hitting a 29-year high last week. Concerns have risen over a weekend report depicting the Bank of the Japan as the largest owner of Japanese shares at $434bn, followed by the nation’s public pension fund.
European benchmarks rallied on Friday on the back of oil companies. A sigh of relief as OPEC+JMMC members agreed to a compromise in making small piecemeal increases in oil production starting January instead of a complete resumption. Signs that one of the biggest obstacles to a post-Brexit deal moving towards a resolution saw the FTSE surge to 10-month highs. Britain is willing to offer a 3-year access agreement with EU fishermen to operate in U.K waters, though the catch volume remain in discussion. Monday session though, saw overnight futures slide 20 points as talks deteriorated on Sunday. Irish Prime Minister noted “it’s a 50-50 right now” with the new source of disagreement being future regulation governing EU and UK businesses to ensure a level playing field.
Wall Street remained firm near record highs as promising stimulus prospects were offset by COVID-19 vaccine doubts. A $908bn fiscal package drew further bi-partisan support on Thursday across Senate and House floors. Senate Majority leader McConnell has been under increasing pressure from fellow Republicans to negotiate a deal as the new proposal already falls way below the $2.2tn Democrats had initially argued for. On the vaccine front, Pfizer hit a logistics snag resulting in 50mn from 100mn of vaccine doses it had planned by the end of this year. Meanwhile leading U.S. infectious disease expert Dr Fauci warned U.K. regulators that they are rushing the approval process without proper clinical trial scrutiny.
Likewise, European indices ended little changed though surprisingly U.K. rallied despite renewed Brexit woes. British negotiators have accused their French counterparts of making eleventh hour demands, derailing progress made thus far. France is demanding a guaranteed level playing field for U.K – French businesses inclusive of a British regulator to police state aid to companies and ratchet clauses to ensure environmental and labour regulations evolve in similar fashion over time.
Mixed results coming into Asia with Australia rallying on open whilst Japan and Hong Kong retreated. Souring US – China relationship seeped into the Hang Seng after Congress passed legislation yesterday that would force Chinese companies to delist from American stock exchanges. Nevertheless, recent data shows Wall Street unphased by geopolitics, piling in a record $212bn into Chinese bonds and stocks this year.
Subdued rally across Wall Street as much of the anticipated optimism has seemingly been priced in already. Yesterday, signs of fresh stimulus hopes were renewed following bi-partisan dialogue between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnel on the proposed $908bn package. Elsewhere, US-China relations continue to overshadow bi-lateral trade. When questioned, the incoming administration noted they will leave the existing phase-one trade deal intact until President-elect Biden reviews all foreign policy. Out-going President Trump was facing allegations of his own when unsealed court documents revealed U.S. prosecutors were investigating whether the White House offered presidential pardons for political contributions.
Within the Euro Zone, the FTSE outperformed after Pfizer BioNTech’s vaccine received emergency approval in the U.K. 20mn doses are expected to be available next week with the elderly first in line. Across the aisle, the German DAX slipped 0.5% as the nation struggles to round the daily infection curve. Chancellor Merkel has extended partial lockdown by 3 more weeks. The on-going Brexit sage still a cause for concern as EU’s chief negotiator warns both sides have yet to overcome differences.
Asia-pacific indices were mixed, with Australia and Japan mute whilst Hong Kong added 210 points from strong Caixin services PMI out of China.
Building on Wall Street’s momentum spurred on by vaccine breakthroughs and prospective approvals later in this month, the S&P500 and Nasdaq surged to all-time highs whilst the Dow Jones underperformed closing relatively unchanged from Monday.
Yesterday’s strong finish followed a proposed $908bn piecemeal fiscal stimulus package by a bipartisan group of U.S. senator amid Fed Chair Powell’s appeal for more government support. Though the package falls short of the $2tn brought forth by Democrats, the bipartisan bill would immediately provide $288bn aid to small businesses and $180bn in additional unemployment. Much needed in a period where ‘the labour market is still 10m jobs below pre-pandemic levels’ as noted by the Fed Chair.
European indices and the FTSE started off December reversing Monday’s woes on the back of news E.U. regulators could approve Pfizer’s vaccines and be ready for distribution by January. The announcement was well received especially as economic growth remains subdued amid stringent restrictions.
End of month profit-taking saw Wall Street tumble early U.S. session. Nonetheless, most indices attempted to recover with Nasdaq outperforming, ending Monday unchanged whilst the S&P500 and Dow fell. Despite, Moderna set to submit its COVID-19 vaccine for approval in the U.S. and E.U, Jerome Powell warned of challenging months ahead. The Fed Chair said “the vaccine front is very positive for the medium term. For now…uncertainties remain, including timing, production and distribution…across different groups”. Meanwhile, Treasury Secretary Mnuchin encouraged congress to re-deploy the re-directed $455bn of the emergency lending facilities to be utilized as another round of fiscal stimulus.
Elsewhere, the U.K and European markets ended November erasing the previous week of gains over on-going Brexit woes. Only five weeks remain before the deadline with fisheries still a sore point of contention. Under current engagements, U.K. and E.U. fishing fleets have full access to each other’s respective waters as well as pre-negotiated national quotas. However, British fishing grounds covers broader nautical miles and is more bountiful than E.U. waters. In return for access, Boris Johnson is haggling over a higher volume of fish Brit’s can catch.
With prospects of a global vaccine roll out within weeks, Asia-pacific indices rallied on open. Both Australia and Japan surged whilst Hong Kong gapped up despite the nation imposing new restrictions amid the latest wave of COVID-19.
Global indices are poised to have one of their best if not the best performing month on record following a spate of well received announcements during November. From Joe Biden’s Presidential win to COVID-19 vaccine breakthroughs and central banks alluding to additional quantitative easing. All events pointing to accelerating economic recoveries next year. However, it is not all smooth sailing ahead as the out-going administration escalates tension with Beijing to cement President Trumps tough on China legacy and wedge President-elect Biden into a hardline position against Beijing. Documents revealed today see China’s top chipmaker SMIC and oil & gas producer CNOOC added to a blacklist curbing access to U.S. investors.
Heightening anti-China rhetoric and month-end profit booking saw risk aversion amid Monday’s Asia session as broad-based benchmarks retreated on open. Both Australia and Japan decline by 125 and 330 points respectively, whilst Hong Kong gapped lower by 130. Futures across U.S. and European markets caught wind and followed similar price action.
Mute volatility across Wall Street as American’s celebrated thanksgiving. Meanwhile, for the first time since the election, President Trump answered questions from reporters. Among the more interesting remarks, Trump has promised to leave the White House once Joe Biden is confirmed by the electoral college.
Across the Atlantic, European indices grind lower amid renew doubts over the highly anticipated vaccines and the economic damage existing restrictions will have on future growth. Following widespread scrutiny over their COVID-19’s vaccine efficacy, AstraZeneca has been forced back into conducting additional global trials. Preliminary results were peculiar, revealing a lower dosage had a better efficacy rate at 90%, whilst a higher dosage reduced the figures down to 70%.
The FTSE was the worst hit, sliding 0.67% after U.K. health minister Hancock announced swaths of England will not only remain in lockdown after December 2nd, but will also be placed under new, stricter tier 3 measures. In tier 3, households cannot physically mingle, hospitability and entertainment venues will be all be shut, and travel is discouraged. Boris Johnson defended the measures stating, “if we ease off now, we risk losing control…forcing us back to a new year national lockdown”.
In Asia, worsening diplomatic ties between Beijing and Canberra saw the S&P200 edge lower as China slap tariffs on Australian wine. Meanwhile, surging industrial profits in China boosted Hong Kong and Japan higher intraday by ??? and ??? respectively.
Rotation out of cyclical firms saw the S&P500 and Dow take a breather after hitting all-time highs whilst Nasdaq took the opportunity to make up for lost ground from tech’s recent under performance. China’s president grabbed headlines yesterday as Xi congratulated Joe Biden’s election win with messages entailing hopes of a “healthy and stable” U.S. – China relationship with “no conflicts” and “no confrontations”. President Xi’s remarks come amid further U.S. sanctions on Chinese firms deemed facilitating Iran’s missile program.
European markets ease off momentum following a series of recent positive announcements boosted broad based benchmarks to multi-month highs. Meanwhile, the FTSE suffered a 1% decline on Wednesday as Brexit tension flare again. European negotiators were unwilling to budge on rules surrounding swap trading by E.U. banks in the U.K. A no-deal Brexit would see disruption in the derivatives market worth $50tn a year.
Mixed results across Asia with Australia following overnight Wall Street sentiment easing 45 points intra-day. Whilst Hong Kong remains unchanged, the Nikkei soared 1.1% as China’s foreign minister Yi and newly elected Japanese Prime Minister Suga forge multilateral trade deals. Both nations have also agreed on a business travel bubble to improve relations.
Widespread risk-on sentiment as global indices continue to savour President-elect Joe Biden’s formal transition into office and the incoming business friendly administration appointees. Janet Yellen’s pick as Treasury Secretary dramatically improved global outlook as the Dow cracks 30,000 for the first time. Alongside Tesla’s debut into the S&P500, with the electric automaker soaring 6%, the broad-based benchmark also settled at historic highs. On the back of Wall Street’s buying frenzy, Nasdaq gained 1.5%.
Though it’s not all smooth sailing ahead. Last week, departing Treasury Secretary Mnuchin retracted $429bn in emergency lending facilities from the Fed and re-directed funds towards the Cares Act. Of which requires congressional approval to access in a Republican controlled senate floor. This move drastically cuts Yellen’s war chest down to just under $80bn.
Prospects of easing social restriction measures in France saw the STOXX and CAC cracking 9-months high again. Among European states, Frances’ virus curbs have successfully rounded the curve from daily infections of 86,000 to 9,000. President Emmanuel Macron is expected to announce relaxation of lockdown rules today. Elsewhere, Australia and Japan are both on course for the best month on record
Short of a full concession, President Trump directed the General Services Administration to initiate formal transition processes following Michigan’s election board certifying results sealing President-elect Biden’s win. Wall Street further welcomed news that Biden’s administration has selected Janet Yellen to serve as Treasury secretary. The first women in the role, but more importantly a friendlier figure towards big banks and financial markets than progressive picks like Senator Elizabeth Warren. By the end of Tuesday session, both the S&P500 and Dow rallied 0.7% and 1.3% respectively, though the Nasdaq underperformed on the back of AstraZeneca’s vaccine announcement. Unlike Pfizer and Moderna, the new vaccine boast a 70% prevent rate, rising to 90% under certain conditions. However, the University of Oxford coordinated trial drew harsh criticism for its lack of sample size.
Meanwhile, European indices gapped higher on open but failed to follow through during yesterday’s session. Despite promising vaccine developments, daily infection cases across the continent remains high whilst the economic damage from wide ranging lockdown measures becomes more apparent.
Asia’s poised to climb following a boost in sentiment from the overnight U.S. session. Thus far, Australia has rallied 0.7% intra-day and remarkably of the past 16 days, 14 has ended in positive territory. Likewise, the Nikkei resumed their winning streak hitting a 29-year high whilst Hong Kong gapped up 0.5% on open.
Vaccine sentiment that propelled the S&P and Dow to all-time highs on Monday has begun fading as the resurgence in COVID infections saw investors rotate back into stay-at-home tech firms. Among Wall Street yesterday, Nasdaq was the only benchmark notching higher, by 0.8%. Meanwhile, the Dow underperformed, and S&P remained unchanged following a clash between Treasury Secretary Mnuchin and the Federal Reserve. Much to the Fed’s opposition, Mnuchin is pulling the plug on the central banks $445bn emergency lending facilities for struggling businesses. Though the program was largely unused, its existence was a source of confidence that relieved market anxiety about the broader economy.
Likewise, ever increasing piecemeal social restriction measures has taken the wind out of U.K. and European indices as many settled within a plus/minus 0.5% range from the previous days close. A recent economist poll anticipates the Euro zone will contract 2.5% in Q4 2020 following a 12.6% rebound in Q3. Whilst Brexit negotiations will move online after a member of the EU team contracted COVID-19. Time is running short as both sides seek to conclude a draft in time for it to be legally checked, translated and ratified before December’s deadline.
A lack of major news in Asia see’s mute activity across Asia-Pacific markets. Experts in Hong Kong foresee a fourth-wave following a rebound in cases with 12 confirmed and more than 20 suspected. Whilst Japanese PM Suga warned the country will move ahead with restrictions of their own, South Australia will come out of hard lockdown on Saturday after contact tracers were misled by an infected individual.
Pfizer one ups Moderna with final clinical-trial data revealing a 95% efficacy rate. Bringing into question whether an additional 0.5% outweighs the vaccine’s tougher storage conditions and shorter shelf life. Pfizer is expected to apply for U.S. and E.U emergency regulatory authorization within days. Despite recent vaccine breakthroughs, Wall Street retreated for a second-straight day, as resurging COVID-19 cases temper U.S. States to set tighter rules on daily American lives. In the meantime, unemployment benefits for more than 10 million workers is set to expire in December unless congress passes a renewed stimulus package.
Across the Atlantic, European indices take a late-session tumble following an uptick from Pfizer’s announcement. Late-session saw investors remain cautious about short-term prospects for a vaccine, considering most health experts expect shots to be widely distributed only in the latter half of 2021. The FTSE fell 0.5% ahead of Thursday’s EU leaders’ video conference summit, seen as the final deadline for Brussels and Boris to strike a draft Brexit trade deal.
Coming into Asia, both Australia and Hong Kong benchmarks gapped lower on open by 0.6% whilst Japan remained relatively unchanged. The S&P200 recovered the entirety of lost ground intra-day after consensus-beating Aussie employment data revealed a resilient labour market.
Wall Street retreated following Fed Chair Jerome Powell downplaying vaccine optimism, citing amid current rising infection rates, there exist significant economic downside in the near term and any recovery has a long way to go. Powell’s sentiment further reinforced by Tuesday’s U.S retail sales data failing to meet analyst expectations. With American consumer spending curtailing as we fast approach Christmas shopping season, alongside a lack of fiscal development in congress, 2020’s year-end outlook is becoming seemingly bleak.
Following suit, European markets corrected from an 8-month high as tighter piecemeal COVID restrictions begin to weigh in on short-term economic outlook. Most recently, post-lockdown, the U.K. government is contemplating stricter controls than the previously announced three-tier system. Sweden too has stepped up efforts, with a new ban on public gatherings and a recommendation to avoid public transport.
The S&P200 defied overnight sentiment edging higher to a new nine-month high and revelling in their first glitch free day of the week. Meanwhile Hong Kong rose 1.1% intraday as China shrugs off news that the U.S. Securities and Exchange Commission is contemplating delisting Chinese companies on U.S. stock exchanges for not complying with American auditing standards. Thus far, Beijing has blocked attempts by U.S. regulators in auditing firms citing confidentiality. Elsewhere, Nikkei set to post two consecutive days of loses as the nation faces COVID strife of their own and investors repatriation results in the Japanese yen appreciating 4 days in a row.
Moderna outshines Pfizer delivering an experimental COVID-19 vaccine with a 94.5% efficacy from late-stage trials. Not only does Pfizer-BioNTech’s vaccine underperform in terms of effectiveness, distribution is complicated as their shots must be transported at -75 degrees Celsius with a 5-day shelf-life. In contrast, Morderna’s alternative can be shipped at -20 degrees Celsius with a 30-day lifespan. As headlines broke consecutive daily records settling at all-time highs. Nasdaq though, continues to underperform medium-term but nonetheless shrugged off cyclical rotational woes ending up for the day. News that Tesla will join the S&P 500 index on Dec. 21 further buoyed tech stocks.
Likewise, amid consecutive weeks of vaccine breakthroughs, European investors cheered the STOXX 50, CAC 40 and IBEX 35 to an 8-month high whilst the FTSE and DAX underperformed, weighed by on-going Brexit tensions. Thus far, investors have been pricing a faster pace in economic revival despite actual vaccine deployment still a long way away.
Mixed results in Asia as Australia drifts higher in anticipation of the RBA releasing monetary policy meeting minutes. Japan retreated intra-day following a meteoric rise since the start of November. Meanwhile, Hong Kong loses ground as China’s sweeping crackdown in financial markets and political arenas begin to ripple throughout.
The ongoing U.S. election saga saw a hint of Trump accepting defeat as the President tweeted “He won because the election was rigged” only to recanted it moments later announcing, “I concede NOTHING”. Despite a transition in chaos and deteriorating health situations across the country, Wall Street nonetheless notched higher last Friday with the S&P500 closing at all-time highs. Whilst the Dow is just 25 points shy from following suite, the Nasdaq continues to underperform amid a rotation towards cyclical shares. Vaccine hope continues to fuel optimism, especially as we will likely seek Moderna’s trial results this week. The incoming administration COVID-19 advisers further relieved concern that they would opt for targeted local restrictions as opposed to nationwide lockdowns. Likewise, European indices and the U.K recovered lost ground from Thursday’s brief correction.
Asia markets poised for gains followings the world’s largest Asia-Pacific free-trade agreement deal signed on Sunday during the 37th Asean Summit. Among the most noteworthy supporters were Australia, China, Japan, and South Korea. The agreement is said reduce tariffs, unify e-commerce rules, and alleviate logistic strains via universal regulations. An expected 26.2tn worth of GDP will flourish under the deal.
Following better than expected GDP figures in Asia session, the Nikkei settles comfortably at a 29-yr high, rallying 0.9% intra-day. Futures saw the S&P200 surge 40 points only to be subsequently weighed by disruptions in the ASX equity markets. Share trading has been paused after the exchange discovered market data issues. Hong Kong enjoyed a 0.97% gap higher but retreated following profit-taking.
Heading into Friday, Pfizer’s vaccine hope could not withhold the increasing risk pertaining to COVIDs’ relentless second-wave. With corona back in headlines, Nasdaq remained stable whilst the S&P500 and Dow retreated from all-time highs. America’s coronavirus complacency see’s daily new infections constantly breaking new highs, with yesterday figure stood at 142,860 cases. Zero congressional coordination has starved States of much needed stimulus support, whilst lockdowns and curfews have been limited to piecemeal implementation. Thus far, New York signalled closing down schools again. And in Chicago, the mayor urged residence to stay indoors.
However, there is no guarantee stricter lockdowns would alleviate the virus’s spread as Italy surpasses 1 million cases, France with 35,897 daily new cases (up from 22,180 on Tuesday) and Britain tops 33,470. Central banking heads also remarked yesterday a COVID-19 vaccine alone is not to enough propel nations out from economic troughs. Consequently, this slew of less optimistic news saw European shares retreat from monthly highs as the STOXX slid 1.8% after having gained 12.5% this month.
Asia saw mixed results with Australia and Japan unchanged while Hong Kong gapped 1% lower. In between US – China, the special Administrative territory is feeling the brunt of rising disputes. Just yesterday President Trump signed an executive order prohibiting U.S investment into Chinese companies with connections to the military. Hopes that a Biden would improve relations was quashed by China’s former finance minister whom remarked “Even if Biden is elected, the U.S. suppression of China will be inevitable”.
Modest gains on Wall Street amid Veteran’s day while Nasdaq back in favour jumping 2.3% as stay-at-home firms recuperated some ground following this week’s sell off. Apple and Amazon were among the better performers, higher by 3.04% and 3.37% respectively. Investors sought refuge in tech as America struggles to contain their second wave. Recent stats in new daily infection cases topping 139K saw New York implementing a 10pm curfew on bars and restaurant. Other risk has risen surrounding the lame-duck period and disruption President Trump may cause. Since Joe Biden’s wins, the administration has not shied away from restructuring the Pentagon, increasing geopolitical tension with China and frustrate trade ties with Europe.
Across the Atlantic, European markets held onto vaccine-driven gains, rallying for 3 consecutive days. Comments by ECB President Christine Lagarde further buoyed benchmarks after outlining plans for additional easing in December during yesterday’s ECB Forum. Meanwhile the FTSE advanced 1.4% amid on-going Brexit negotiations. Despite a looming deadline, there is enough optimism a conclusion will be met warranting negotiators to carry on talks next week.
Asia saw profit-taking in Australia as banking underperformed heavily, offsetting gains among other blue-chips. Disappointing machinery orders in Japan resulted in the index edging lower denting prospects for a capital expenditure recovery. Whilst China’s crackdown on both tech and Hong Kong’s democracy weighed down the Hang Seng by 0.8% thus far. The city’s government expelled 4 pro-democracy lawmakers, prompting another 15 to potentially walk-out en masse.
Pfizer’s vaccine continues to grab headlines with the S&P500 and Dow holding steady after Monday’s overreaction. Still an outlier among Wall Street, Nasdaq diverges 1.9% lower for two consecutive days. In addition to investors adjusting bets taking advantage of a cyclical recovery, tech worldwide has been plagued by a slew of negative announcements. Amazon faces anti-trust complaints from the E.U whilst Ant group will return 120bn HKD to investors following a suspended IPO. Meanwhile, China is overhauling antitrust guidelines to reign in on internet monopolies and their growing economic influence.
Despite European member states in partial or full down, broad-based benchmarks surge on ahead on the back of the European Commission expected to approve a contract for the supply of Pfizer’s and BioNTech’s potential vaccine. Investors are willing to look ahead past a pandemic plagued market towards optimism. Not to mention President-elect Joe Biden is expected to restore U.S. – E.U. trade relations.
Mixed results in Asia with Australia ticking higher, Japan remaining relatively unchanged and Hong Kong weighed down by political turmoil after Beijing seeks to disqualify Hong Kong lawmakers deemed “unpatriotic”.
Initial COVID-19 vaccine euphoria saw the S&P500 and Dow surge to all time highs, only to have gains pare off by the end of session. Meanwhile, Nasdaq diverged from Wall Street as investors rotated out of technology stocks whom benefited from this years’ work-from-home norm.
Combined efforts from pharmaceutical drug-maker Pfizer and biotechnology firm BioNTech resulted in the development of an experimental shot that appears 90% effective in stopping COVID-19. Despite a successful large-scale clinical trial, questions remain regarding how safe the vaccine is over the long run. Most recently, final-stage trials of Chinas’ Coronavac vaccine were halted in Brazil citing serious adverse event. A category inclusive of death, incapacitation and hospitalization.
Nonetheless, European benchmarks withstood investor cynicism by holding onto intra-day gains. Leading the pack was Spain, up by 8.6% and France, higher by 6.2%, closing at multi-month highs. Both of whom were hardest hit from the recent resurgence in infections across Europe and anticipating economic slowdown from lockdown.
Global futures and indices extend gains on Monday open following Joe Biden’s win over the weekend as President elect, emboldening risk-on sentiment across markets. Though President Trump has yet to acknowledge the outcome despite 290 electoral votes having been called for the incoming Commander-in-Chief and on the path to 306. The incumbency is pursuing legal means to contest the ballot counts in key battleground states. Nonetheless, Joe Biden will be moving forward today in launching the Democrats transition effort. On the top of the agenda, containing the coronavirus pandemic as the U.S. surpasses 10M cases on Sunday. Shoring up support for a 3.5tn stimulus package in a much-anticipated battle on a Republican-led Senate floor. And reigniting international relations via rejoining global efforts such as the Paris climate accord.
Asia’s session saw Japan rally to highs unseen since 1991, up 2.5% as the Nikkei prices in a future where trade relations with the U.S. would improve. Meanwhile, Australia broke out of a 5-month consolidation, rising as high as 1.4% intraday, whilst Hong Kong remains comparatively mute much like China’s reception with no public congratulations from President Xi. Futures on the S&P500 and Nasdaq is just a tad shy away from all-time highs, though Dow continues to lag. European benchmarks ended Friday with mild losses weary of election uncertainty and growing COVID cases, though is expected to gap higher when London opens.
U.S. election fatigue setting in on day 3 as neither party concedes. Democratic nominee Joe Biden inches closer to the needed 270 electoral votes to win presidency. A definitive win in either Pennsylvania, Georgia, Nevada or North Carolina would assure victory. On Thursday Biden addressed there was “no doubt” he would be elected the 46th president of the United States. Meanwhile, Trumps’ administration files lawsuits as a path to victory claiming illegal vote counting post-election day. Georgia and Michigan judges have already thrown the cases out of court citing a lack of evidence.
As investors abandon pre-election risk-off positioning, momentum continues Thursday with Wall Street rallying for 5 consecutive days regaining lost ground from the week before. Though a gridlocked government would infer a lower probability of a timely and sizeable stimulus package, it would also dim prospects to enact tougher corporate regulations or taxes.
America’s uncertainty failed to hurt European sentiment as broad-based benchmarks followed suit to 2-week highs. Despite a resurgence in COVID cases, strong Q3 earnings and optimistic company outlooks lifted investor spirits. Likewise, fresh quantitative easing buoyed the FTSE higher.
Despite a victor yet to be decided, American democracy achieved a monumental feat with highest voter turnout rate (67%) in more than a century. The current tally stands at 71,825,845 for candidate Biden and 68,258,563 for President Trump. As vote counting progressed through the second day, battleground states Wisconsin and Michigan flipped in favour of Biden, calling a 253 electoral lead ahead of Trumps’ 214. The most probably road to victory for the former vice president is via either Nevada or Pennsylvania whilst the incumbency has an uphill battle to win all remaining battleground states to retain a second term. In any case, the much-anticipated blue-wave never did eventuate and with a divided government expected, a Republican controlled Senate and Democrat majority in the House. The next four years may as well be gridlocked.
Coming into Asia, global indices and futures took a breather from yesterday’s frantic price action which ultimately saw Wall Street make significant headwinds. The prospects of a “do-nothing” government left investors favouring defensive tech stocks in light of cyclical companies that would be benefit from a much elusive stimulus package. Nasdaq rose 4.5%, the S&P500 up by 2.3% and the Dow lagged posting 1.4%.
Global investors brace for U.S. election volatility as votes pour in across America with more than 100m ballets casted early, breaking previous records. Coming into election day, Democrats had hoped for a blue wave, especially across battleground states like Florida, Pennsylvania, Ohio and Texas. With confidence, Wall Street rallied higher by the end of Tuesday’s session with the Dow Jones leading the pack at 2%. Likewise, European indices closed at weekly highs after having one of their best days since June as Biden win is seen to improve trade ties between U.S. and Europe. STOXX initially gapped 0.9% higher before finishing the day up by 2.8%.
During Asia thus far, votes have shown a more traditional distribution of favourability between candidate Joe Biden and President Donald Trump. Other than Arizona, the incumbent holds a comfortable lead in hotly contest key states surprisingly in an electoral college race now considered too close to call. Global broad-based benchmarks have swung wildly between positive and negative territory with Australia and Japan relatively unchanged from Tuesday’s close. Meanwhile, despite Chinese authorities putting the brakes on Ant Group’s IPO scheduled on November 5th, Hong Kong still managed to etch out some gains. Among overnight futures, Nasdaq outperforms as much as 4.4% before settling 2.5% higher.
A day away with Monday polls showing Democrat Joe Biden still ahead nationally by 8.5 points, global indices have seemingly shaken off U.S. presidential election jitters amid European efforts in containing a resurgence in COVID-19. Both the S&P500 and Dow rebounded 0.7% and 1.1% respectively though Nasdaq continues to lag with the tech benchmark edging lower. The tone set by Apple and Amazons’ outlook last Friday has investors rotating into cyclical stocks well positioned to take advantage of an inevitable U.S. fiscal stimulus.
Likewise, European markets followed suit, further buoyed by better than expected factory activity overshadowing recent re-implementation of lockdown protocols among member states. Though morning trading saw a glitch delaying STOXX opening by 1 hr, the index nonetheless rose 1.8% by sessions’ end. Germany and U.K. also posted healthy gains amid on-going Brexit negotiations with the deadline just nine weeks away. A no-deal Brexit would see $900bn of annual bilateral trade tarnished by tariffs and quotas.
Mondays’ mood flowed into Asia’s session with Hong Kong and Japan opening upbeat. Poised to benefit ahead of RBA’s announcement the S&P200 positioned itself higher by 2.3% intra-day as investors price in the expected 15 basis point cut.
Just two days away from U.S. elections, where upon results will set investment sentiment for the remainder of 2020 and dictate American policy for the next four years. A record 98m have voted early already. Sunday polling has Democrat Joe Biden leading the President in the final stretch though key swing states that carried Trumps’ 2016 win remain narrowly fought over. The presidents’ re-election campaign has been persistently plagued by his administration’s failure to contain the outbreak.
A sell-off in tech weighed down Wall Street on Friday, though the S&P500 and Dow managed to end the session higher. Both Amazon and Facebook noted grim profit outlooks for 2021 amid COVID’s resurgence. Elsewhere, reprieve for European markets as strong earnings help prop up broad-based benchmarks after posting their sharpest weekly decline since February.
Coming into Asia today, Australia, Japan and Hong Kong opened with a spring in their step as China released solid manufacturing and services PMI over the weekends. Though futures were a little changed.
A little reprieve on Thursday for global markets following one of the biggest routs since February despite worldwide coronavirus cases rising by more than 500,000 yesterday amid Germany and France locking down. Meanwhile, at least nine states in America broke daily records in new infections.
Nonetheless, Wall Street eked out some gains on the back of tech’s resilience within current quandaries. Quarterly profits from juggernauts like Google, Amazon, Facebook and Apple had exceeded analyst estimates.
Across the Atlantic, fresh stimulus hopes from the ECB buoyed European benchmark higher. Collectively, Euro Zone members will be issuing 1.2tn in government bond sales next year of which 460bn is expected to be purchased by the central bank. The Euro dollar received the news via sinking 70 pips to below 1.7000.
COVID-19 fall out fuels global risk-off sentiment as demand shifts toward safe-haven assets. Wednesday saw French President Macron announce new national lockdowns set to come into force on Friday and estimated to last a month. New measures dictate citizens are only allowed outside to seek essential goods, medical help and work. Schools will also remain open. Meanwhile, German Chancellor Merkel imposed a piecemeal approach to shut bars, restaurant and theatres for November. Likewise, schools stay open and shops too but with restrictions. Across Europe, Spain, Italy, Greece and Portugal reported record daily cases of infections with an increasingly bleak outlook a continent-wide lockdown is approaching.
Economic implications reverberated throughout global markets. The S&P and Nasdaq fell 2.8% and 3.4% respectively whilst the Dow made a 4-month low. U.S. energy stocks were among those hardest hit as they tracked the 4.2% decline in crude oil settling at $39.12. Prospects of demand recovery has stalled, further reinforced by yesterday surprise inventory surplus of 4.3M compared to an expected 1.5M.
Outlook for a global rebound dim ahead of U.S. presidential elections as uncontained outbreaks across Europe and U.S. hinder economic recoveries. While U.S. benchmarks Dow and SP500 closed lower at 0.8% and 1.2% respectively, Nasdaq bucked the trend etching out a minor gain on the back of AMD’s $35bn takeover of Xilinx. Meanwhile, possibility for COVID relief reached zero following the U.S. Senate adjourning for recess till November 9.
Europe paints a similar picture extending losses across the board. The FTSE, DAX and STOXX hit 4 to 5-month lows with France and Spain faring better settling at monthly lows. Investors foresee a slippery slope towards full nation-wide lockdowns after Germany began implementing “light” measures preventing bars and restaurants from opening. Likewise, France considers extending nightly curfews for another month.
Asia opened mixed, with Hong Kong and Japan relatively mute, though Australia rallied 0.6% following solid earnings announcements from blue chips like Afterpay and Blackmores.
With U.S. elections a week away, risk-off sentiment amid fruitless stimulus negotiations and a persistent resurgence in COVID-19 across major financial hubs saw global benchmarks tumble at the start of the week. Prospects for a coronavirus relief bill before election day fell to near zero as House Speaker Pelosi and Treasury Secretary Mnuchin failed to reconcile differences, with the senate floor scheduled for a break starting Tuesday.
Following Wall Street’s disappointing performance overnight, Asia opened with Australia and Hong Kong sinking 1% and 1.1% respectively. Japan somewhat recovered from the initial 0.7% loss on the back of Canon’s forecast beating earnings report. Germany’s blue-chip index DAX led Europe’s declines with a 3.7% plunge dragged down by SAP SE’s pessimistic outlook. The stock slumped 22% as they abandoned their profitable forward guidance attributing from the current pandemic. Meanwhile, STOXX declined 3% amid stricter restrictions in Italy and Spain further dimming hope for a Eurozone economic recovery as business activity is forced to a standstill.
COVID-19 pandemic firmly back in headlines with the U.S. reaching consecutive record number of daily infections at 85,317. France followed suit with cases topping 50,000 as the government imposed upon two-thirds of population with a 9pm to 6am curfew. Italy and Spain fared no better, implementing sweeping measures in attempts to round their second-wave. WHO Director general Tedros Adhanom Ghebreyesus, warned “This is a dangerous moment for many countries” as they “strike a delicate balance” between protecting residents and minimizing economic shocks.
Weekend news impacted Asia’s session with futures and indices opening lower. Australia initially rode against the wave, rallying as high as 38 points intraday before succumbing to the prevailing global pessimistic tone. Fortunately, Hong Kong remains closed today celebrating Chung Yeung Day.
Fading U.S. stimulus hopes left Wall Street whipsawing during last Friday’s session with all three major benchmarks relatively unchanged. Progress in bi-partisan negotiations throughout the week had increased the probability of striking a deal before November elections. Come Sunday though saw both congressional parties accusing each other of moving the goalpost.
Meanwhile, European indices bucked Wall Street’s trend ending higher. The FTSE and STOXX rose 1% and 0.8% respectively with France leading the pack higher by 1.1% on the back of reassuring news that Brexit trade talks between U.K. and E.U. will continue to October 28th.
Ahead of America’s final presidential debate between President Trump and candidate Biden, Wall Street exhibited a choppy U.S. session, starting in the red, the Dow and S&P500 recovered back into positive territory. Across the Pacific, U.K. and European markets trimmed Wednesday’s losses following Britain’s Finance Minister Sunak announcing new measures to protect furloughed workers and cash grants for affected businesses.
In Asia, subsequent after a heated U.S. debate, markets were mixed with Hong Kong rallying 0.72% whilst Australia and Japan slid lower. Much of prevailing mood is still dependant upon the whipsawing U.S. stimulus saga. Yesterday, House Speaker Pelosi and Treasury Secretary Mnuchin signalled we’re “just about there” as one of the four key disputed points was near resolving. The remaining points to settle include state and local government aid, school funding and liability shielding for businesses from coronavirus related incidents.
Stimulus talks in America drag on resulting in a choppy Wall Street session overnight, ultimately edging the benchmarks lower. Despite Tuesday’s deadline, House Speaker Pelosi kept hopes alive stating she and the White House ‘has a prospect for an agreement’ but is unlikely to pass a relief bill before November elections. Senate Majority Leader Mitch McConnell has also shown a lack of interest in allowing the bill cross Senate floors before Amy Coney Barrett’s Supreme Court nomination.
U.K and European indices struggle to post gains despite a more optimistic Brexit outlook after E.U’s chief negotiator Michel Barnier signalled a deal is within reach. Discussions will resume with negotiators meeting in London on Thursday, aiming for an agreement by mid-November. Upon the news hitting headlines, the pound rallied over 200 pips to a six week high ending the session at 1.3141 whilst the FTSE sank 2.2% weighed down by losses in exporters. The STOXX tumbled 2%, the FRANC down 2.1% and the DAX is lower by 1.6% amid intensifying lockdown protocols, hitting the healthcare and construction sector most.
Aftermarket stimulus developments saw overnight Wall Street futures rebound from Tuesday’s lows. Investors were on edge as House Democrats self-imposed deadline loomed with no progress over the horizon. Much to market’s relief, late afternoon House Speaker Pelosi signalled a potential deal before November 3rd saying “I’m optimistic because I do think we have a shared value — not many — but a shared value that finally they want to crush the virus”. Republican’s had made concessions to up their deal to 1.88tn from 1.8tn, closing in on Democrats 2.2tn goal post. Thus far, Pelosi has yet to budge.
Following futures, Hong Kong rallied as high as 1.2% on Asia’s open over renewed stimulus hope. Likewise, Japan up 0.5% as the export-dependent nation, of which approximately 20% of total exports is reliant upon U.S. trade. Elsewhere, Australia opens relatively unchanged after the benchmark surged 6% MTD on the prospect of November rate cuts and a growth boosting government budget.
Wall Street falters as stimulus deadline looms Tuesday with indices ending the past 5 sessions lower. Despite House Speaker Pelosi remaining optimistic that legislation could be devised in the final hours of the strait. Thus far, neither congressional parties have budged on their $1.8tn (Republican) and $2.2tn (Democrat) proposals. Regardless, Senate majority leader McConnell will put forth a $500bn piecemeal deal to the floor for vote on Wednesday.
Worldwide COVID-19 cases officially passing 40M on Monday weighs on European markets. Broad-based benchmarks fell yesterday, with the STOXX leading the charge lower by 1.56%. Italian cases hit a daily record, with the government responding via implementing evening 9PM curfews. Likewise, Spain recorded their 1 millionth case as the nation reignites lockdown procedures. Pessimism across the channel outweighed signs of progress on a Brexit trade deal. Members of the House of Lords had signalled their willingness to remove Boris Johnson’s controversial clause in relation to Ireland. Nevertheless, the FTSE was down 0.8% by sessions end.
Global indices and futures edged higher following Asia’s open despite risk-off sentiment on Wall Street from previous weeks end. The last two hours of Friday’s session saw Wall Street erase intraday gains ending down for the day. Investors seemingly unwilling to hold onto weekend exposure in the face of U.S. stimulus risk. On Saturday, House Speaker Pelosi set a deadline dictating certain levels of progress must be met by Tuesday for a stimulus deal to be signed before November elections. Pelosi and Treasury Secretary Mnuchin agreed to speak again on Monday.
Across the Atlantic, European indices continue to track the developments of COVID’s resurgence across the continent. Economic recovery efforts have been curbed as government re-implement stricter piecemeal lockdown measures. Nonetheless, a little reprieve for Europe’s markets with drug maker Pfizer announcing a potential coronavirus vaccine, ready by years end. The DAX, FRANC and STOXX responded via modest gains in positive territory between 1 – 1.2% respectively.
No-deal Brexit headlines continue to plague U.K with P.M. Boris Johnson informing businesses to prepare for a non-agreement. FTSE though eked out 0.7% gripping onto hopes that negotiations will persist in the following week despite political rhetoric between Brussels and Britain. Sign’s that the conservative party was willing to water down Johnson’s ‘walk-away’ demands further buoyed U.K markets.
European indices and global futures tumbled amid London session as EU leaders refused to make concessions just hours before PM Boris Johnson was expected to announce whether the U.K. will walk away from negotiations. Brussels left the ball on Johnson’s court, of whom expressed his disappointment and will respond on Friday.
Nonetheless, by the end of U.S. session most broad-based benchmarks recovered on improving stimulus sentiment. Speaker Pelosi re-iterated the urgency for a relief package before elections as she continued talks with Secretary Mnuchin. President Trump further voiced his willingness for a bi-partisan deal exceeding $1.8tn.
Among the weaker performers of the day, Euro STOXX 50 settled 1.2% lower as investors were unnerved over accelerating COVID cases in Europe. In so far that Italy registered close to 9,000 daily cases, up from 7,000 while France jumped to 30,000, up from 22,500 the day before. Likewise, cases in Poland rose to a record 24% higher. With impending new restrictions, investors are growing weary the pandemic will continue into 2021 crippling Europe’s recovery.
Despite U.S. threats to add China’s Ant Group to a trade blacklist, Hong Kong rallied 1.3% whilst Australia and Japan slumped. The prospect of Ant Groups dual listing in Hong Kong and Shanghai raising a record $35bn USD kept the market float.
On-going stimulus saga continue to plague global markets after Treasury Secretary Steven Mnuchin extinguished hope that congressional parties could strike a stimulus deal before November elections. Banking also weighed heavily on Wall Street as Wells Fargo tumbled 6% on a pessimistic forward guidance despite posting positive earnings last quarter while Bank of America sank 5.3% with the banks’ trading arm’s performance disappointed when compared to Goldman Sachs.
Meanwhile, European indices edged lower with prospects of more lockdown ahead while vaccine delays further dent sentiment. Just recently Italian P.M Giuseppe Conte implemented new social distancing restrictions in restaurants, sports and school activities. Across the English Channel, rising Brexit uncertainty lingers onto top of the FTSE, with the benchmark falling 1.1% as Boris Johnson’s self-imposed deadline is set to expire today. Though the pound recovered, up 80 pips to an off-remark made by the U.K Prime Minister signalling he won’t abandon Brexit talks.
Following four consecutive days of advance, Wall Street retreated on Tuesday as U.S. stimulus negotiations stalling grabbed headlines. House Speaker Pelosi rejected a piecemeal $500bn proposal brought forth by Senate Majority Leader Mitch McConnell, far smaller than the $2.2tn passed by the House. In a rare glimpse in agreement, Trump defied Republican narrative tweeting “STIMULUS! Go big or go home!!!”.
Global mood was further dampened after Johnson & Johnson paused COVID-19 vaccine trials citing unexplained illness in participants. Likewise, Eli Lilly & Co halted their trials citing safety concerns just weeks after AstraZeneca suspended their late-stage trials. Given the plethora of negative news European indices snapped a 3-day winning streak as investors recalibrated expectations of when a cure will eventuate while the continent braces for a resurgence in cases. Banking slid over rising odds the ECB will implement more stimulus to combat COVID’s resurgence.
Asia opened mixed with Japan recovering from overnight wounds whilst Hong Kong slips lower following China’s President Xi Jinping’s nation-wide address, celebrating the 40th anniversary of the Shenzhen Special Economic Zone establishment. Australia rallied on the back of Aussie household sentiment index surging 11.9% in October despite continuing dire circumstances in Victoria.
Amid observance for Columbus Day, U.S. technology company’s led Wall Street’s advance with Amazon, Apple and Twitter posting gains between 4.75% - 6.35% respectively. A combination of U.S. stimulus negotiations progressing and a COVID-19 resurgence in Europe (benefiting stay-at-home tech firms) was partly fueling Monday’s rally.
Despite Italy and U.K. preparing for stricter restrictions jeopardizing an already fragile economic recovery, European benchmarks tracked Wall Street’s overnight gains hitting a five-week high.
Coming into Asia’s, the Hong Kong Stock Exchange remains closed as the territory braces for a level 8 typhoon whilst Australia continues to outperform rallying 0.6% on open. Since October, the Aussie S&P200 has been end in the green 6 of the last 7 sessions. Japan remains in consolidation as investors await direction from the newly elected Prime Minister Suga.
Despite a plummeting approval rating and conflicting health status reports, President Trump reassured Wall Street on Friday by increasing his previous stimulus proposal to 1.8tn. Moving closer to Pelosi’s 2.2tn goal post. As investors grew more hopeful, U.S. indices settled at weekly highs by the close of the session. Likewise, Europe edged higher on Friday as retail firms upgraded earnings outlook defying resurging infection rates.
With U.S. observing Columbus Day and Canada celebrating Thanksgiving, Asia pointed to a mixed start. Hong Kong rallied 1.2% following the PBOC announcing a capital restriction adjustment over the weekend. Australia crept higher whilst Japan slumped as Monday data showed wholesale inflation remains negative for 7 consecutive months, heightening deflationary risk.
Asia is off to a mute start as investors mulled whether taking on weekend volatility outweighed risk if U.S. stimulus talks were to derail over Saturday and Sunday. Following Trump personally torpedoing congressional relief negotiations, the President’s subsequent backflip fuelled a 2-day rally across global indices. By the end of yesterdays session, Wall Street closed at monthly highs with the S&P500 leading the charge. Likewise, European indices hit a 3-week high despite Brexit risk and newly imposed Iranian bank sanctions protruding into investor mood.
With talks resuming between House Speaker Pelosi and Treasury Secretary Mnuchin, the U.S. dollar edged lower against a basket of major currencies. Though Pelosi has rejected a stand-alone airline bailout, her party has revised down their proposal to $2.2tn (from $2.4tn). Also. as election odds blow out in favour of Joe Biden, investors are seeing an increasing likelihood of stimulus if Democrats won the presidency. Of exotic currencies, China’s yuan rallied 0.5% on open today after a week-long Chinese holiday. A resurgence in COVID-19 cases have set back Thailand’s plan to reopen for tourism. As a result, alongside continuing anti-government protest the Thai baht continues to under perform among Asian currencies against the greenback.
The whipsaw continues with Wall Street reversing Tuesday’s losses closing at intra-day highs. House Speaker Pelosi indulged Republicans in negotiating an airline bail out, whilst Trump performed a piecemeal back flip signalling his willingness to sign a stand alone $1,200 stimulus check for the American people.
Despite Brexit negotiations breaking down again, the FTSE rose 0.93%, following U.S. optimism. Two aspects of the deal remain an obstacle. Restrictions on state subsidies and fishing rights for European countries in British waters. While Boris Johnson strung along threats to walk, E.U. officials have stated they will not be pressured into making concessions. Elsewhere, mixed results from European indices with Dax up 1.4%, STOXX edging ever slightly higher and France unchanged.
Indecision dominated markets this week with Trump abruptly ending talks with Democrats via a single tweet. As hope for a secondary coronavirus aid package evaporated, so too did Wall Street's gains for the day. A 180-backflip following the Presidents tweet on Saturday stating “USA…needs stimulus. Work together and get it done”. Moment afters the announcement hit news headlines, Dow Jones plummeted 500 pts. Following suite, the S&P 500 and Nasdaq down 60 pts and 260 pts respectively.
Contagion from U.S. seeped into European benchmarks with the STOXX erasing a 0.7% lead, boosted by banks initially, to end the session down 0.8%. Germany’s DAX fared no better, up 0.8% at one point on the back of better than expected factory orders, only to close -0.75% lower.
Following President Trumps discharge from Walter Reed hospital after being treated since Friday, Wall Street and European indices reacted positively, ending their sessions near intra-day highs. Investors are hoping Trumps personal experience with the virus will increase the odds in pushing a fiscal deal sooner. Current negotiations have seen piecemeal concessions between both congressional parties, with Democrats now seeking a $2.2tn package whilst Republicans have upped their offer to $1.6tn.
U.S. energy, health and tech firms were the biggest gainers for the day. Likewise, Europe’s oil majors surged on the back of crude prices elevating 6%, settling above $39. A worker’s strike in Norway saw 6 offshore oil and gas fields cease operation cutting off global production by 330,000 bpd. Capacity is expected to decrease further as more workers join the strike.
Global indices initially declined sharply after news broke on Friday revealed U.S. President Donald Trump had tested positive for COVID-19. Alongside the risk-off sentiment, investors subsequently piled into gold and the Japanese yen. Nonetheless by the end of the U.S. session, much of the shock was reversed as further details released by the administration suggest Trump only has a mild case.
Despite confusion over the weekends, from contradictory accounts of the president’s prognosis to the severity of drugs administered, futures and indices were off to a solid start in Asia session today. Australia rallied as much as 1% on open, with Hong Kong and Japan gapping up. Futures on Wall Street benchmarks pointed higher, set for gains when the underlying opens.
Since Asia’s open, the greenback lost ground against most G7 currencies. Likewise, the yen has retreated all risk-off gains from Friday. Crude continues to drift lower, touching $36.51 as demand outlook remains vulnerable. In the face of inventory deficits, resurging COVID cases hampering global demand, especially in Europe, persistently grab headlines.
Despite Tuesday night’s chaotic presidential debate between President Trump and candidate Biden, Wall Street ended Wednesday’s session higher as Democrats passed a 2.2tn stimulus bill in the House. Unfortunately, as House Republicans thoroughly rejected the package, the likelihood of a Republican controlled Senate approval is minimal. Nasdaq led the charge, up 1.7%, carried by tech juggernauts Amazon, Apple and Microsoft.
Elsewhere, European benchmarks struggled to post gains as pharmaceuticals earning disappoint investors and oil firms slip from worsening crude prices.
Asia’s session fared no better as Australia fell on open. Japan resumed trading (lower) after an unprecedented one-day outage on the Tokyo Stock Exchange due to a hardware glitch. Nonetheless with China and Hong Kong on holiday due to Mid-Autumn festivities, subdued trading is expected till London opens.
The U.S. dollar fluctuated against most currencies on Wednesday, as the market had hope for another economic stimulus plan, which improved risk sentiment. The plan may help alleviate the economic shock caused by the recession caused by the coronavirus epidemic.
Overall, the U.S. dollar has experienced its worst quarter since September 2017, falling by about 3.5%. Investors expected the economy to recover rapidly after the coronavirus epidemic. This prompted investors to withdraw from safe-haven assets and buy riskier High currency.
The U.S. dollar fell against the Japanese yen and weakened against higher-risk currencies such as the Australian dollar, New Zealand dollar and Canadian dollar.
Oil prices dropped again. The crude oil fell more than 5% during the day to 38.57 US dollars per barrel while Brent oil fell more than 4% to 41.11 US dollars per barrel. Vitol Group, the world's largest crude oil trader, said that due to the new round of lockdown measures triggered by the epidemic, the recovery of global crude oil demand has slowed, and there is limited room for oil prices to rise in the fourth quarter.
Vitol Group Executive Committee member Chris Bake said that before entering the fourth quarter, the market originally expected oil demand to improve, but now demand has become more uncertain. He said that the demand for refined oil products is weak and there are large inventories.
The Organization of the Petroleum Exporting Countries (OPEC) and crude oil producing countries including Russia reached an agreement on production cuts in April, prompting a rebound in international oil prices. However, there have been no major moves to boost oil prices. The price of Brent oil still has fallen by 30% year-to-date.
Sterling increases broadly yesterday after Bank of England (BoE) Deputy Governor voiced strong opposition to setting negative interest rates, saying that the benchmark could not be lowered any further without counter-productive results. “I see the effective lower bound [for interest rates] still at 0.1 per cent which is where Bank rate is at present. It is useful to stress that,” Dave Ramsden, deputy governor for markets and banking, said.
A lack of major macroeconomic data in the day ahead, combined with China’s Mid-Autumn Festival leaves global indices and futures off to a mute start in Asia’s session. Despite posting three consecutive weeks of losses, Wall Street surged in the latter half of Friday’s session with the Nasdaq, S&P500 and Dow posting gains of 2%, 1.3% and 1% respectively. U.S. Technology firms remain in investor favour, resilient to renew virus fears whilst European benchmarks were hampered by rising inflection cases. Worries are mounting over the possibility of stricter social lockdown measures across northern Britain and London.
Since money laundering allegations on the 21st, the U.S. dollar index has enjoyed a resurgence in popularity as investors sentiment turned risk-off and sought safe-haven attributes. The appreciation further fueled by a lack of definitive clarity by Chairman Powell, on the Fed’s new guidance framework. Mixed with potential volatility arising from Tuesday’s Presidential debate, the greenback nears a 2-month high. Elsewhere, a final round of Brexit trade deal negotiations scheduled Monday saw money flows out of Europe.
The U.S. Dollar remains the strongest currency over the week, followed by Yen, as people are avoiding risk. European stocks cautiously inch higher. Sterling rebounds slightly, with some support the new jobs support scheme.
The U.S. Dollar Index, that measures the strength of the U.S. dollar against a broad basket of currencies, rebounded from a low of 91.75 to 94.50. The rebound happened since the Federal Reserve keep the interest rates at the bottom until the end of 2023. The uptrend of US dollar has put significant pressure on commodities like gold and silver. Metals has suffered a significant decline from the recent highs.
Recent rising COVID-19 cases and threats of lockdown in Europe, along with US general election on November will be the main concern in the market. Right now, the unclear direction over coronavirus policy and lack of new fiscal stimulus plan are causing a new level of uncertainty in the market. Concerns and anxiety have been rising about the second lockdown in the world especially in Europe, contributing more anxiety of renewed restrictions in the US.
Broad-based benchmarks dragged down globally by banking following a report released by Buzzfeed alleging rampant money laundering practices between 1999 and 2017. Suspected amount of activity equated to $2tn. Declines on Wall Street were further exacerbated over deteriorating prospects that a secondary stimulus bill will fail to reach an agreement by September’s end as the U.S. Senate remains in stalemate over the size of the relief package. European indices fell their most in 2 months over renewed piecemeal restriction measures in the U.K, Demark, Greece and Spain. Sparking fear that it may lead to a second nationwide lockdown. Travel and leisure shares felt the brunt of concerns. Despite a cascade of negative news, Australia and Hong Kong gapped higher on Asia’s open with Japan edging down.
A lack of optimistic news ended Fridays’ session risk-off as global indices continued to slip. Investors remained watchful over the weekend amid a persistent virus pandemic, rising geo-political spats between China versus the world and U.S. election risk as rhetoric between both parties intensify. Asia’s off to a mute start with Japan on holiday, embracing Respect for the Aged Day.
Mixed results left the U.S. dollar index relatively unchanged against G10 currencies. Yuan retreated as China kept the lending steady for 5 straight months. Hong Kong Monetary Authorities sold another 3.31bn HKD in defending the lower 7.75 band. Elsewhere, the consolidation in gold continues to tighten whilst Bitcoin settles above the 10,000 level.
Recovery in crude oil prices was halted on Friday as news of inventory gluts and lackluster global demand grabbed headlines. China, the second largest oil import is expected to cut imports by 10% for the coming month. While recent data out of U.S. sees fuel consumption down 13% year on year. News of Libyan oil fields restarting production further added to the headwinds.
Bad news is good is news as Wallstreet recovered ground from a mid-session drop despite less than ideal jobless claims and housing data. Slump in banking weighed down European benchmarks. Record low near zero interest rates and continuing quantitative easing have squeezed traditional banking margins. The gradual acceptance of alternative online banks offering digital wallets have also chipped away at market share. For the lack of data ahead, Asia is off to a mute start as investors digest the weeks monetary policy decisions and await further clarity from government contemplating additional fiscal stimulus.
Yesterday’s session ended with the greenback losing all gains from Wednesday. For the past 2 months, the U.S. dollar index has consolidated between the 92’s and 93’s since the initial stimulus measures began expiring in August. Reluctance by the Federal Reserve to expand bond-purchases beyond short-dated securities is further fueling lackluster volatility. Upon the horizon however, aid negotiations are back on the table as President Trump diverged from Republican views signalling his willingness to sign a $1.5tn stimulus to plan. House Democrats have urged Speaker Pelosi to bring up a new relief bill to the floor for a vote. Swing district members have pressed for a $2.2tn deal whilst hard liners want a vote on a $3.4tn deal instead.
Wallstreet reacted poorly to Federal Reserve Jerome Powell’s FOMC remarks as broad-based benchmarks retreated. Despite signalling rates will be left near zero through till 2023 ensuring 2% inflation over time will be achieved, the Fed fell short on implementing additional easing, targeting long-dated bonds. European indices ended the session mixed. Disappointing U.S. investor sentiment flowed into Europe however was offset by a continuing strong retail sector quarterly result. Indices and futures fell on Asia open as time allowed markets to sufficiently digest the implication of Powell’s press conference. Thus far, Australia has slid 1.1% while Hong Kong fell 1.6%, and Japan edged 0.8% lower.
Asia’s off to a quiet start as indices await the Federal Reserve’s economic projections and policy statement scheduled today. Wallstreet found support posting 2 days of consecutive gains anticipating a more flexible dovish tone given Chairman Powell’s greater tolerance to above norm inflation. An unexpected jump in ZEW economic sentiment coinciding with quarterly profit beating forecast in fashion retailers saw European indices boosted higher. Luxury good stocks like LVMH, Kering and Hermes also gained on the back of China’s first positive retail sales figure since January.
Apart from the yen, other G7 currencies eased off against the greenback ahead of tonight’s Fed meeting. As Yoshihide Suga cements his position as Japan’s new prime minister, repatriation in the yen is steadily growing with USDJPY at 105.44 by yesterday’s session end. Though Suga has reiterated in continuing his predecessors “Abenomics”, many doubt whether additional easing can be pursued considering the BOJ is already overextended. Debt to GDP is also one of the highest among developed countries, a concern for Suga given his first point of order is ponder whether an extension of fiscal aid is warranted.
Wallstreet bounced on the back of mega multi-billion-dollar deals from Softbank’s sale of chip designer Arm to Nvidia for $40bn, to Oracle outbidding Microsoft for social media platform TikTok. Both Nvidia and Oracle gapped above 5% on open, with the former ending the session up 5.82%. Likewise, the latter held onto most gains, up 4.32%. Europe ended the session relatively unchanged as gains in tech and travel offset losses from energy. Despite optimistic retail sales and production data out of China this morning, Asia is off to a mute start. Nikkei unchanged on news of Yoshihide Suga’s landslide victory in becoming Japan’s next prime minister with his win already priced in.
Backlash against Boris Johnson’s proposed internal market bill by high-profile ex-prime ministers halted the pounds freefall. Voicing in opposition, Tony Blair, Gordan Brown, John Major and Theresa May as they see Johnson’s unilateral amendment risking the country’s standing and reputation. The bill is currently making its way through parliament whereby later in the week Commons will vote. Elsewhere, the Hong Kong Monetary Authority sold 388m HKD as USDHKD attempted to breach the lower end of the 7.75 – 7.85 band during the U.S. session. Despite geopolitical rising geo-political tensions, China’s yuan has confidently settle’s above a 16-month high. Among developed nations, China is expected to be the only one to post positive economic growth at years end. Release of today’s positive leading economic indicators further propelled the yuan’s rise intra-day.
Broad-based benchmarks off to an optimistic start to the week, as Wall Street and Asia – Pacific lost ground for two consecutive weeks. Europe and U.K. fared better, ending last week’s sessions higher despite escalating Brexit tensions between Brussels and Britain. Global indices and futures rallied on Asia open with Nasdaq recovering 1.3% and Australia reaching as high as 1.2%. Nikkei climbed 0.8% as Softbank sells chip designer Arm to Nvidia for $40bn while Yoshihide Suga is poised to win leadership elections today for the ruling Liberal Democratic Party. Consequently, making Suga the next Prime Minister of Japan. Though analyst only see Suga winning 37% of regional party votes, he is expected to obtain 70% of party lawmaker votes, making the overall vote tally over 60%. Thus far, Japanese markets have been receptive of Suga’s appointments especially as he pledges to continue “Abenomics” of his predecessor.
Better than expected but nonetheless disinflationary data saw the U.S. dollar lose ground against majors and gold on Friday. Recent U.S macroeconomic data leaves the precious metal in a conundrum. Previous expectations illustrated price growth as rising amid monumental money supply and a deluge of fiscal stimulus. As such, gold broke historic highs reaching beyond $2,000 as investors looked towards safety against the inevitable inflation. Geo-political tensions between China and U.S. further fueled the rise. However, despite an ever-improving U.S labor market, CPI data has been lackluster. Of interest since late August gold remains in a tight slumber as it awaits further economic clarity.
Price action for the on-going week sees global indices choppy following previous week’s tech-rout, where broad-based benchmarks declined as much as 10%. Evident as Nasdaq saw average daily trading ranges of 4%, though week to date the benchmark has only declined 2.9% and down 1.7% yesterday. S&P500 and Dow also retreated 1.5% and 1.4% respectively. European shares fell on the back of rising tensions between Brussels and U.K as well as ECB’s unchanged policy announcement. For the lack of data ahead, Asia is off to a quiet start, though Nikkei rallied 0.8% on open as Chief Cabinet Secretary Yoshihide Suga outdistances other PM candidates with polls showing he is widely expected to win the title in the ruling LDP leadership election. Suga intends to continue implementing Abenomics, of which entails aggressive monetary and fiscal reform to boost inflation.
The American greenback regained lost ground while EURUSD initially spiked 70 pips over a less dovish tone from the ECB’s monetary policy statement. Only to be stifled by ECB Presidents Christine Lagarde’s Euro dollar remark’s that the central bank is carefully evaluating implications of a strong Euro. Especially as Europe’s economic recovery loses steam. Across the English Channel, P.M. Boris Johnson stoked further tensions as the U.K. government broke international law by overriding Northern Irelands Brexit protocol. The protocol would have allowed goods to travel freely between Northern Ireland (Non-EU) and Republic of Ireland (EU) without custom checks. Amid rising political risk, the pound sank over 200 pips by the end of session. A no-deal Brexit would leave trade between continents in absolute chaos.
Wall Street leading benchmarks snapped their losing streak as investors took advantage of tech darlings deemed heavily discounted from recent highs. Tesla rebounded 10% after sliding 20% into their biggest single-day loss since inception. Pandemic-immune winners Apple, Amazon, Facebook and Google also climbed. The S&P500 rallied 1.7% with Dow trailing at 1.5%. Most European indices erased all losses seen on Tuesday as the market awaits ECB’s monetary policy decision today.
Momentum seen in U.S. did not follow through into Asia, with Australia dropping 1.3% since open while Nikkei edged up slightly. Hong Kong fell on Yum China Holding’s IPO, of whom are operators of well-known brands like KFC, Taco Bell and Pizza Hut. Shares fell as much as 4.1% on their debut today. An utter contrast to Nongfu Spring’s bottled water IPO performance on Tuesday, whom rallied 85%.
Improving risk sentiment saw money flows back into major G7 currencies as the dollar index retreated from a 3-week high. Bitcoin and gold saw bounce off major levels while oil earned reprieve bouncing back from low 36’s to 38 dollars. Elsewhere the central bank of Russia forecast the initial bump in recovery will slow down in coming months with deflationary risk offset by a depreciating rubble.
Tech-rout in Nasdaq leaves no markets unscathed, headlined by Tesla, as the company lost 34% of market cap since the stock split. Nasdaq losing 4% and down four consecutive days. Followed by S&P and Dow posting losses of 2.9% and 2.6% respectively. Brexit negotiations undermined UK and European indices as the deadline looms. U.K. PM Boris Johnson ratcheted up the notion, if a withdrawal agreement with respect to Northern Ireland is not agreed upon by today, he walks. If a no-deal Brexit occurs, at stake is $1tn in trade. As news spread of Masayoshi Son’s $4bn option gambit on U.S. tech through Softbank and the ensuing rout, the company declined 4.81% yesterday, dragging down the Nikkei a moderate 0.8%. Asia set to resume declines felt during U.S session, as Australia, Hong Kong and Japan edges lower on open.
Brexit back in the headlines with the pound sinking 0.9% on a quiet day more or less as the U.S. celebrates Labour Day. Against other majors and gold, the greenback gained slightly. U.K PM Boris Johnson publicly stated on Monday if a withdrawal agreement is not met by Oct. 15th, he’d rather a no-deal Brexit than compromise on conditions seen favourable to the E.U. Markets were reminded of the risk of UK leaving without a deal, especially as the Dec. 31st deadline looms, where the standstill agreement expires.
Elsewhere President Trump ups the ante against Beijing, as he intends to decouple economic relationships between China and the U.S. Tariffs will be imposed on American companies creating jobs in China, as well as forbidding such companies from obtaining federal contracts.
Risk-off sentiment continued into Friday as global indices fells sharply during the first half of the U.S. session before recovering lost ground in the latter half. Wild swings on Nasdaq with the tech benchmark losing 4.8% however ending the session down only 1.5%. Similar price action was observed in other Wall Street and European indices. Speculation afloat after Softbank grabbed headlines with their recent regulatory filings unveiling a $4bn option bet on U.S. tech darlings like Amazon, Microsoft, Netflix and Tesla. The $4bn in options is roughly equivalent to $50bn in stock exposure. With an aggressive option bet of that size, an ensuing feedback loop can drive stocks higher as options sellers are forced to hedge by purchasing the same shares. As experienced in the recent bull market. Hong Kong and Japan were little changed on Asia open, while Australia rallied as much as 1%. Upcoming U.S. Labour day is expected to keep futures relatively mute for the rest of Monday.
Despite better than expected jobless numbers, the US dollar ended mostly unchanged amid the whipsawing price seen throughout Friday. Gold has seemingly found a sweet spot between $1,900 and $2,000 for the past 3 weeks, while bitcoin tumbled, briefly touching 10,000. Seen by many as an important psychological level.
Risk-off with Nasdaq leading the declines, tumbling 4.9% yesterday, followed by S&P500 down 3.2% and Dow sliding 2.4%. Since March lows, Wall Street has powered ahead on unprecedented levels of fiscal and monetary liquidity. Technology stocks made the quickest recovery as many firms were set to benefit from the new work-from-home culture and social-distancing norms. Thursday’s euphoria waned, pulling back tech heavyweights Amazon, Apple, Microsoft and Tesla as investors reassess recent record-breaking price action. Following the US tech rout, European indices lost most, if not all gains made on Wednesday. Asia’s opening fared no better, with Hong Kong gapping down 0.6% and Australia sliding. Though Nikkei rallied on open as uncertainty surrounding Japan’s next prime minister becomes clearer.
Sentiment on America’s economic recovery remains weak as the Federal Reserve keeps their pedal on the printing press. Nonetheless the dollar has managed to rebound back gaining ground against other G7 currencies as global central banks consider further easing. Analyst expect the ECB to add an additional 350bn to the existing 1.35tn bond-buying program by the end of the year. While RBNZ Adrian Orr and BOE Deputy Dave Ramsden remarked the need to increase quantitative easing, BOE Governor Bailey is exploring the utility in negative rates. BOJ Masazumi Wakatabe spoke of vigilance against deflationary pressure with more stimulus.
Momentum continues to push Wall Street higher with S&P and Nasdaq closing at record high. Gains were seen in the broader market and away from recent tech-focused firms like Apple, Tesla and Zoom signalling greater confidence in the overall economy’s recovery. Though lagging, Dow is now only 1.6% below historic highs made back in February. Following suit, European indices snapped a 4-day losing streak on the back of technology firms. Benchmarks gained on average 2.6% across the board. Asia off to a relatively mute start for the lack of data during the session.
Elsewhere, the greenback held onto gains across major currencies despite disappointing ADP non-farm employment numbers. As inflation risk subside, gold dropped 1.3%. Recent deflationary data out of Europe and a rising Euro has the ECB’s chief economist Philip Lane concerned, implying potential measures might be taken. After briefly breaching 1.2000, EURUSD has retreated to the 1.1800 level.
ASX200 rallies on Asia open despite GDP figures cementing Australia first recession in around three decades. Lack of news leaves Japan and Hong Kong relatively mute. Wall Street continues to benefit from Apple’s stock split while Zoom quarterly profits double as more corporate paying clients embrace work-from-home culture. Both S&P500 and Nasdaq again extending grounds into fresh territory by the end of the session. Conversely, European indices ended poorly with four consecutive days of declines. Weak performing blue-chip companies in Britain and lacklustre inflation in the Euro Zone is hampering returns.
Solid manufacturing data out of America halted the dollar’s decline as the currency gained against majors. Oil continues to have trouble holding above key psychological level $43 after briefly touching before retreating, while gold settles below $2,000 after momentarily surpassing just only a month ago.
Apple’s 4-for-1 stock split propels Nasdaq above 12,000 psychological level, while Dow nursed losses weighed down by a delaying TikTok deal. Concerns arose when China implemented new rules impeding the app’s sale to foreign companies like Microsoft and Walmart without Beijing’s approval. European indices retreated by the end of US session on deflationary data coming out of Germany and Spain.
Following summer bank holiday, UK futures gapped down 1.6% on Asia open but has since recovered some ground. Asia-Pacific markets looking at a mixed session, with Australia down as much as 1.5%, Hong Kong up 0.4% and Japan up 0.6%.
Disappointing performance from the American greenback continues after Fed Vice Chair Richard Clarida elaborated on Powell’s remarks from last week. Clarifying the new framework allows leeway in not triggering higher policy rates even amid a low unemployment rate environment.
Japan rallies on Asia open, recovering back lost ground from Friday as cabinet members of Abe’s Liberal Democratic Party vie for the country’s top position. Current front-runner so far is chief cabinet secretary Yoshihide Suga. A self-made politician, loyal to Shinzo Abe since 2006 and on occasions serving the duties of chief whip. Among other notable candidates, ex defense minister Shigeru Ishiba, popular with voters but lacks sway with fellow lawmakers. And Fumio Kishida, previously thought to be Abe’s successors, but lacks favorability among the populace.
Elsewhere, the S&P500 closed 7 consecutive days higher into fresh grounds. Following suite, Nasdaq and Dow ended the session up. The industrial average just a little over 3.1% below historic highs made back in February. Oil remained mute despite Hurricane Laura’s aftermath, Gold rallied and in turn, the America greenback resumed weakening against majors after Fed Chair Powell’s remark on Thursday.
An interest to pair to watch for the week, USDTHB as the currency consolidates within a technical triangle. Being one of the worst performing currencies in Asia, the nation suffered substantially form a lost in tourism income, which contributes a fifth of GDP. Recent comments by Thailand’s finance minister see the economy bottoming out in the second half of 2020 and recovering early 2021.
Mixed reaction from Jerome Powell’s speech as the Federal Chairmen unveiled a new monetary framework in achieving inflation and full employment goals. While the S&P500 and Dow etched out gains, Nasdaq ended the session slightly lower as the market digest remarks by the Fed chair. Despite the new policies implication in overshooting inflation beyond 2%, Gold retreated 1.3% as investors questioned whether existing tools will be able to achieve such a scenario.
In Asia, breaking news of Japan’s Prime Minister Shinzo Abe’s resignation shocked markets with the JP225 index declining as much as -2.9%. JPY crosses rallied on the announcement.
Elsewhere, the dollar index though volatile throughout the Jackson Hole forum, ended relatively unchanged. Though the Aussie and Kiwi rallied against the greenback, losses in Yen offset much of the gains. The Euro and Pound mute from previous sessions close.
ASX 200 rallied on open whilst Hong Kong and Japan dipped despite continual record-breaking gains on Wall Street. Mega-cap tech firms like Apple, Alphabet, Amazon, and Microsoft led the charge as the S&P500 and Nasdaq recorded their fourth day all-time high. Investor sentiment thus far seemingly unfazed by COVID-19 as tech has proven resilient throughout the pandemic. Europe also followed suit, notching higher just under 1% at the end of their session.
The US dollar resumed its declines after durable goods far exceeded expectations. In spite of a deteriorating labour market, forward looking indicators remain healthy raising concerns over inflationary pressures. Gold rose as geopolitical tensions between US – China grabbed headlines with Beijing testing four missiles in South China Sea. US in turn announced trade and visa sanctions on 24 companies over their role in constructing islands for China in disputed waterways.
Dow diverges from Wall Street ending the session lower as Apple’s 4-to-1 stock split prompted a reshuffle in the benchmark. American juggernauts Exxon Mobil, Pfizer, and Honeywell ousted by Salesforce, Amgen and Raytheon. Euphoria in the S&P500 and Nasdaq continues as both indices hit fresh highs for 3 consecutive days as the market lacked negative news. Despite a record-breaking US session, Europe was mute whilst indices in Asia are off to a quiet start, though Australia dipped on open from poor performance in banks and coal.
As Hurricane Laura (a category 3) is set to engulf America’s Gulf Coast in the next 48 hours, crude oil celebrates a breakout to the upside after a prolong period of consolidation. Concerns over fuel shortage are rising as numerous refineries in the hurricane’s path have either been shut down or are in the process of closing. 80% of refinery lines across the Gulf of Mexico has also been shut, accounting for 1.5m bpd. Depending on the aftermath, they may not re-open for a while.
Optimism on a phase 1 trade deal and development on vaccine treatments boosted bullish bets on global indices. With Moderna Inc. negotiating a deal across Europe to supply atleast 80m doses and Trump expanding FDA approved blood plasma treatments, markets have seemingly shrugged off mounting sentiment COVID-19 would stall recovery efforts.
Speaking over the phone, US – China officials suggest a trade deal is likely to be achieved by January 2021, though concerns have been raised over the pace of existing purchases, standing at $77bn. China would need to buy another $123bn to comply with terms originally signed back in January 2020.
Alongside the RNC convention, President Trump announced an additional $1bn food purchase program to aid families dealing with economic hardship, unable to meet subsistence levels. The existing $3bn program is set to expire by the end of August.
Both S&P and Nasdaq settled at records highs whilst Dow led gains yesterday, is still 4.5% below all-time highs. On Monday, the CAC40 rallied by 2.29%, EuroStoxx600 by 1.58% and DAX30 by 2.36%. With Japan rallying 1.1% on Asia open, Australia and Hong Kong looked towards a modest start, however later in the session, gains have subsequently retraced back. US dollar holds steady as the next likely driver of direction will be Powell’s speech on Thursday.
For the week ahead, the most anticipated event will be the Federal Reserve’s annual Jackson Hole symposium on Thursday. Across the globe, central bankers, finance ministers, academics and bankers will convene virtually to discuss economic policies and options in a COVID-19 ridden world economy. Investors hope for further clarity over the Fed’s response measures if an additional stimulus package fails to be negotiated. Others await whether overshooting inflation beyond 2% is on the cards. If Eurozone’s recovery stalls, would an increase in quantitative easing be warranted. Many are also keen if Mr Bailey would elaborate on utilizing negative interests as one of BOE’s monetary tools if Britain’s recovery loses momentum.
Though little to watch out for today, global indices gapped up on Asia open with Hong Kong rallying 1.3% within the first hour. Buoyed by news of an FDA approved convalescent plasma treatment for COVID-19. However, among patients treated clinical success has been rather mixed. Concern have also been raised over long-term side effects of the transfusion.
Against most G-10s, the dollar parred back some losses on Friday. Thus far, the Sing has enjoyed a steady appreciation against the greenback. Almost retracing back an 8% depreciation since the start of the year. Throughout the pandemic, Singapore has benefited from a government with deep fiscal reserves relieving monetary authorities of lowering the currency band to manage growth concerns. Just recently the government announced a further $100bn aid package in support of recovery efforts
Tesla pulls Nasdaq to record highs as the electric vehicle company recently reinvigorated investor interest by announcing a 5-to-1 split. The stock settling just above $2,000 has gained 45% in the past 7 days, whilst the tech benchmark rose a modest 4.5% the same period. Despite poor jobless claims figures, the remainder of Wall Street followed suit though Asia rallied on open, optimism fizzled mid-session.
Elsewhere, the US dollar lost ground against other majors after yesterday’s unemployment claims. In turn, gold retraced back some losses from Wednesday’s $75 drop.
Surprisingly, the Turkish lira remained steady after the central bank left interest rates unchanged at 8.25% on Thursday. Markets had anticipated a possible rate hike to 10%, but instead was left with fringe policies to cease funding on one-week repo’s and an increase in mandatory reserve ratios for lenders. Turkey’s leader President Erdogan had always repeated a view that high interest rates leads to high inflation, a belief other central banks oppose.
Muddled messaging and lack of clarity from yesterday’s Federal Reserve minutes has tempered recent gains in global indices. Wall Street reacted poorly when meeting minutes revealed a dovish tone short of market sentiment. Asia follow suit with Australia gapping down 0.6%, both Hong Kong and Japan sold off at open. The US dollar parred back losses, sharply appreciating against most majors. While risk-haven assets, bitcoin and gold failed to hold above key psychological levels $12,000 and $2,000 respectively.
Wall Street upbeat as the S&P500 caps off a 50% percent rally from March lows and sits comfortably above record highs made back in February. The bounce back marks the fastest bear-market recovery in the index’s history. Following suit, global indices and futures rallied higher in Asia’s open whilst Hong Kong slumps on news the US State Department has informed university administrations to divest their endowment holdings away from Chinese companies. A letter was sent to university boards as a warning that further sanctions and restrictions towards Chinese firms is currently in the mix.
NASDAQ remain in favour with the tech benchmark again settling at record highs. Amid a global pandemic, investors continue to see tech focused innovation firms as the main beneficiary. Likewise, Golds’ decline last week has transitioned into a correction with the precious metals resuming its rally yesterday. The S&P500 ended up but still a hairline short of February highs whilst Dow Jones was weighed down on news Berkshire Hathaway slashes holdings in US banks.
Global indices off to a soft start, whilst Hong Kong outperforms in Asia session. Hang Seng opened higher fueled by news the central bank of China will inject 700bn yuan in lending facility loans to financial institutions. A further 50bn yuan was also injected in reverse repos. Last Friday close, European indices slid lower and Wall Street remained mute with the S&P500 reluctant in attempting to break record highs.
A lack of major macroeconomic news in Asia leaves indices and futures actionless. Gold resumed its rally yesterday after finding support as recent filings from Bridgewater revealed the hedge fund had increased holdings in Gold ETF’s by $340M. Rising geo-political tensions between two powerhouse states, an uncontained virus propagates and stimulus induced reflation sees investors holding the precious metal as a hedge against such bleak uncertainties. Oil surprisingly continues to hold its ground amid a report by the International Energy Agency forecasting global demand for oil to stagnate as air travel remains subdued.
Elsewhere, Turkeys finance minister admits expectations of expanding 5% is unlikely to be achieved by the end of 2020. Recent IMF and World Bank forecast instead see the country contracting 3.8% - 5% by years end. It is estimated approximately $65bn in central bank foreign reserves had been spent in defending the depreciation.
US dollar decline resumes after getting a little reprieve these past 2 days. Gold too has found support just above the 1,860 level, bouncing back from its single 1-day biggest decline. Despite the increase in volatility, the precious metal is still one of the best performing assets this year. In focus is still stimulus talks in Washington. Accusations have been thrown between President Trump, the Republicans and the Democrats in not wanting to negotiate.
Nonetheless, S&P500 ended the session up just a hair below record highs from February. A third of the indices rise attributable to gains in Apple, Amazon and Microsoft. As we move towards US presidential elections in November, market sentiment had been cautious to potential risk. Only to be relieved as Democratic ticket Joe Biden, announced Kamala Harris as his running mate. Both of whom seen as centralist, with policies friendly to financial markets.
Gold tumbles over $100 in a single day as the stalemate in Washington continues. Deteriorating relationships between congressional parties has seen a lack of talks since last Friday. Wall Street followed the decline as markets become increasingly concerned a compromise in further fiscal aid is getting harder to achieve. Expectations now see a deal more likely to be struck in September.
Asia though has opened choppy with investor sentiment mixed. Nikkei rose as exporters benefited from the recent depreciation in the yen whilst Hong Kong and Sydney ticked lower on weakening household sentiment.
Off to a positive start for Asia with indices up over yesterday’s session highs, shrugging off an ever-deteriorating relationship between America and China. In response to US placing sanctions on 11 Chinese and Hong Kong officials, China retaliated with 11 sanctions of their own. The list avoided direct personnel from Trump’s administration but did include allying US senators such as Marco Rubio and Ted Cruz.
China thus far has remained ahead of the curve in their economic recovery. Recent auto sales data illustrated a 16.4% year on year increase alongside four months of consecutive gains. Crude oil responded upbeat to the data on top of announcements by Iran to cut output by 400,000 bps in compensation for overproduction for the past 3 months. Vacancies in oil storage are also rising as energy companies begin taking back product to meet renew demand.
For the week ahead, initial focus will be on the four executive orders Trump signed in providing temporary relief to the US economy, bypassing congressional law makers. Among other nuances, a difference of $2.4tn currently divide Democrats and Republicans from signing a deal. Thus far, Asia has opened slightly upbeat with US, UK and EU futures looking to edge higher. The American greenback experiences one of few reliefs, halting its depreciation and ended up on Friday close. Much of market sentiment still sees the dollar depreciating over the long term amid continuous quantitative easing by the Fed and expectations on top of Trump’s aid relief, US congress will etch out another stimulus package.
Turkish lira continues to hold ground as attempts to settle above the 7.3000 level fails. Moves from Turkish authorities suggest they will be taking a step back from active intervention when over the weekends regulators announced tax exemptions for foreign exchange trades. Elsewhere, Mexico’s central bankers will convene on Thursday, likely to cut policy rates for the 10th consecutive time, while Peru, Egypt and Serbia expected to hold rates steady.
Global indices slip in Asia as market participants await non-farm payroll due to be announced today. Mix US employment data has left most benchmarks directionless. Whilst ADP on Tuesday saw deteriorating labor markets, yesterday’s claims data showed sizable improvements. Wall Street though remains buoyant on talks of additional fiscal stimulus as opposed to the progress of a deal itself.
Selling in Turkish lira intensifies as USDTRY reaches record highs with attempts by Turkeys central bank to prop up the failing currency. This year alone the lira has depreciated more than 18% against the American greenback. In defending the lira, authorities are burning through dollar cash reserves, of which is nearing depletion. Without raising interest rates soon to stifle the currency’s weakness, the nation will be opening its doors to rising inflation on top an already dysfunction money market.
Wall street pushes higher with earnings season on its last legs whilst Asia starts off mixed. For the data ahead in the remaining week, topic of interest for global indices will remain on progress in stimulus talks in America. Recent Central Bank announcements have illustrated most policy makers reluctant to expand monetary easing programs as many sit tight and observe. With fresh outbreaks, cracks in the global recovery is appearing but have yet to unhinge the positive momentum in recent manufacturing statistics.
Growing concerns as investors worry China may trip itself over their own feet. China thus far, has been a global exception in GDP growth. Prices in base metals have jumped to multi month highs on China’s renewed demand boosted by government financed infrastructure and construction projects. Supply shortages resulting from coronavirus have also contributed to the price rise. Nevertheless, recent crackdowns in shadow bank lending have small and medium businesses fearful. Most of whom, do not qualify for traditional banking. Plans to cap rates at 15% have been announced the Supreme Court will cut such enterprises off from crucial finances.
Gold settles above $2,000 on the back of plummeting Treasury yields. Concern surrounds the lack of progress in stimulus talks between the two US congressional parties. The longer the delay to reach a deal, the greater the cost over time for the US economy. The more the Federal Reserve will be required to continue its various quantitative easing measures. And with it, the continual debasement of the dollar. Investors worried of subsequent inflation have been forced to seek safety in precious metals.
NASDAQ continues to outperform global indices as the index closes at record highs. Amid rising tension between the US and China over TikTok, a Chinese-owned video social media app. The White House has taken a step back. As opposed to an absolute ban, the administration will allow a deal between Bytedance (TikTok’s owner) and Microsoft. Microsoft will be able to acquire the full operation of the app in the US. Both American and Chinese tech stocks surged on the prospect that geopolitics will force further buyouts in the horizon.
Gold edges closer to 2,000 with inflation expected on the horizon as Asia opens mixed. Initial improvements in sentiment is waning. Previous boosts in global macroeconomic figures from pent-up demand when economies re-opened back up seems more likely a one-off now. With re-surging global cases continuing to hamper recovery, tourism which represents 10% of global output is left decimated. Recent attempts to restart the industry met with failure when an Arctic expedition cruise was hit with a large-scale Corona-virus outbreak.
Asia continues to falter despite Big Tech from Wall Street smashing earning estimates after hours. Amazon, Apple and Facebook saw surging second quarter revenues pulling Nasdaq higher with only Google recording it’s first revenue decline. What is becoming more evident is the gap in dual economies. Traditional stores and services have seemingly suffered from the on-going virus pandemic, whilst millennial firms catering to the new-age, thrive.
Initial relief in Global indices with the Fed pledging a “full range of tools” to support America’s lethargic economy. Nonetheless, much of the optimism fizzled with Asia opening mixed. Weighed down by the constant stream of Coronavirus updates. Europe and Hong Kong face alarming surges in cases after easing restrictions. Australia on tilt with additional state border closures in Queensland. Fatalities in the US topped 150,000 as California records 200 deaths in a single day.
Global indices lost ground as they await the Federal Open Market Committee’s announcement due today. Yesterday’s disappointing earnings announcements in Wall Street from blue chips further exacerbated the declines. Expectations see no rate changes from the Fed, of whom have already implemented a super-accommodative monetary policy. With the Fed just yesterday announcing further extensions to emergency lending facilities till the end of the year. Originally, the program was set up to help support struggling businesses requiring access to short-term funding and corporate debt. Acting as a backdrop. Results so far has seen an improvement in the flow of credit.
Confidence in the dollars continues to wane. An outbreak yet to be contained, a Fed in unprecedented supply of money and a Congress in talks to unleash a further $1 trillion top-up stimulus package. As investors seek a hedge against the inevitable inflation, Bitcoin broke past 11K heading towards 12K after a prolong period of consolidation. Alongside the digital currency, Gold continues its record-breaking highs.
On the back of history’s most accommodative monetary stance by the Federal Reserve, Gold sets record high briefly touching 1944 before settling lower. With inflation expectations rising, real yields are becoming negative making precious metals an attractive asset as the dollar continues it decline. Alongside precious metals, bitcoin breaks 10K. Wall Street on disappointing earnings, whilst Asia opened relatively mute.
Global indices lower on a foray of pessimistic news. Asia led the decline as China steps up geopolitical tensions. Among trade disputes and tit-for-tat consulate closures, China further escalates by proposing to stop recognizing UK oversea passports held by Hong Kong residents. Hong Kong implements additional quarantine and social distancing measures whilst Australian state NSW considers locking down once again as bordering Victoria experiences its deadliest day. With 300 infections and 6 deaths. Wall street not unaffected, led by poor earnings from technology and consumer goods, a deteriorating labor market and a Senate in disarray, struggling to find a balance on a top-up stimulus package.
Wall Street brushes off geopolitical conflicts on better than expects earnings whilst China and Hong Kong indices decline as tensions escalate. The US has slowly intensified rhetoric recently banning TikTok, a popular Chinese owned social media app. And just yesterday demanding the closure of the Chinese consulate in Houston. China thus far has condemned the move. Threatening closures of US embassies in China.
US dollar continues its decline whilst precious metals surge towards historic highs. News of stimulus packages deals in Europe whilst US in disagreement spurred investor sentiment to more safe haven assets against the dollar. Markets fear political frays will leave the size of the stimulus package short of expectations.
Tech stocks pull ahead with Nasdaq closing at record highs. Tech giants Amazon and Zoom announced robust growth, benefiting greatly from economic dislocation resulting from COVID19. Usage in e-commerce and video conferencing soared as people are less reluctant to go outside and working-from-home becomes the norm. Wall Street and global markets followed suit on the back of a series of positive developments. Oxford University led research showed promising results of a potential vaccine, US senate moving forward with an additional rescue package as previous benefits are set to expire and EU’s recovery fund now closer to an agreement. The deadlock broken on conditions rebates being provided to so called frugal members.
A pandemic out of control as nations respond with stricter mandatory measures while others in internal deadlock. Both Hong Kong and the Victorian state of Australia now require mask to be worn when outside. Fines will apply if disregarded. Across the Pacific, Trump reassures supporters the virus will disappear whilst withholding new federal funding for coronavirus testing.
Markets mixed as Asia indices retrace gains from Wall Street yesterday. News of an early phase vaccine for COVID-19 helped lift markets amid worrying concerns containment has been futile with Tokyo recently put on the highest alert level. Whilst ever-increasing geo-political turmoil threatens with greater uncertainty. Right after signing the Hong Kong Autonomy Act, the Trump administration back-tracked against sanctioning Chinese officials and withdrawing additional visa requirements for Chinese students.
Wall Street trades higher on a potential COVID-19 vaccine whilst US banks set aside $28bn in preparation for current and future loan losses. The vaccine still in early testing phases and loan loss forecasts optimistic in outlook. Bank executives from three of the largest US banks JP Morgan, Wells Fargo, and Citigroup stress the biggest forthcoming risk is uncertainty. With respect to containing the second wave, whether additional fiscal and monetary stimulus will be implemented.
Risk-off as US investors prepare for earning seasons. Wall Street for the most of it, has remained remarkably upbeat amid economic damage wrought by the pandemic. Not unsubstantiated as recent economic data revealed stark contrast to March and April gloomy figures. Yesterday’s volatile rejection from fresh highs however suggest sentiment waffling. Unlike before, this earnings season will offer an insight as to whether companies are resilient to and how they have coped with a once in a lifetime crisis.
Faced with the rising rate of global infections, markets diverge from grim realities and continue to rally. On the surface, much of the rally seemingly supported by talks of additional fiscal relief in the works and prolong low rates to remain. Others suggest markets have come to realize an alternate theory. The global economy is transforming upon accepting working-from-home does not affect productivity, the exponential rise of e-commerce and in turn a re-invention of logistics
There is seemingly no end in sight as Coronavirus cases surge. A combination of re-emerging hotspots and government reluctance to act swiftly has cascaded into state-wide infections and in-turn, lock down proceedings. Joining Australia NSW, Queenlands will block border entry from Victorians. Coming Saturday, Hong Kong will re-implement stricter social distancing measures. Curfews to be applied in Serbia. New Jersey to sign an order requiring masks to be worn when outside.
On the other side of the spectrum, whether in favor or against the strict policies implemented by China during their pandemic. Of global nations, China is emerging as the front-runner in successfully flattening the curve and subsequent waves. Investor confidence high with the Shanghai Composite Index breaking out of a year and half consolidation to 3,400. and Yuan appreciating beyond the 7.000 psychological level. Whilst the momentum may slow, with funding cost remaining low in the foreseeable future.
Last week’s losses retrace on back of news that Beijing only had 9 new (reported) cases. US and Asian indices trade higher from Friday’s close. AUD then NZD & GBP outperform to start the week. EURUSD trades up. Gold hit monthly highs as investors seek the safe-haven metal over concerns there will be a delay in global economic recovery