Macro Roundup (Nov 16)

SHANGHAI, Nov 16 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The safe-haven Japanese yen and Swiss franc strengthened on Friday, as the threat of a new COVID-19 wave in the United States and Europe chilled the increased risk appetite that had been driven by promising vaccine news earlier this week.

At 104.72 yen, the dollar had lost 0.32% against the Japanese currency on Friday morning in New York. The yen dropped around 2% versus the dollar on Monday. The Swiss franc firmed to 0.9132 against the dollar, after trading at 0.9192 mid-week.

The dollar slipped 0.18% against a basket of currencies.

Global markets surged on Monday after Pfizer Inc said its experimental vaccine was more than 90% effective in trials.

The news saw the dollar rise as traders quit their long-yen positions. But currency market traders became more risk-averse on Thursday and Friday as infections spread and the heads of the Federal Reserve and the European Central Bank (ECB) stressed that the economic outlook remains uncertain.

On Wall Street, U.S. stock futures rose on Sunday night as traders assessed a sharp market rotation that led to a mixed weekly performance last week.

Dow Jones Industrial Average futures were up by 202 points, or 0.7%. S&P 500 futures traded 0.7% higher and Nasdaq 100 futures advanced 0.9%.

The S&P 500 posted a record closing high on Friday and notched a one-week gain of 2.2%. The Dow rallied more than 4% last week and briefly hit an intraday record last week. The Nasdaq Composite lagged, however, sliding 0.6%.

Those moves came as traders piled into beaten-down value names at the expense of high-flying growth stocks amid positive vaccine news. The iShares Russell 1000 Value exchange-traded fund (IWD) rallied 5.7% last week while its growth counterpart, the iShares Russell 1000 Growth ETF (IWF) slid 1.2%.

Pfizer and BioNTech said last week that their coronavirus vaccine candidate was more than 90% effective preventing Covid-19 participants in a late-stage trial. The news sparked hope for an economic recovery, thus making value stocks such as United Airlines and Carnival Corp more attractive. United and Carnival rallied 12.4% and 15.9%, respectively, last week.

Oil prices fell more than 2% on Friday, pressured by swelling output from Libya and fears that rising coronavirus infections may slow the recovery in the global economy and fuel demand.

Hopes for a vaccine kept crude futures on track for a second straight weekly gain.

Brent crude was down 72 cents, or 1.7%, at $42.78 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled down 99 cents, or 2.4%, to $40.13 a barrel.

For the week, both were headed for a rise of more than 8%.

Gold rose on Friday as increasing coronavirus infections globally re-ignited concerns about the economic toll from the pandemic, while scepticism over the reach of a potential COVID-19 vaccine further boosted the safe-haven metal.

Spot gold rose 0.5% to $1,884.76 per ounce. But bullion was still bound for its worst weekly loss since late September, down 3.4% so far, mainly hurt by initial euphoria over an effective vaccine from Pfizer earlier in the week. U.S. gold futures settled up 0.7% at $1,886.20.

“We have got COVID-19 raging in the U.S. and the uncertainty surrounding that and the potential for some more economic damage in the coming months; all that is working in favour of gold market bulls,” Kitco Metals senior analyst Jim Wyckoff said.

Pfizer and BioNTech SE on Monday said their COVID-19 vaccine was more than 90% effective based on initial trial results.

Fifteen Asia-Pacific economies formed the world's largest free trade bloc on Sunday, a China-backed deal that excludes the United States, which had left a rival Asia-Pacific grouping under President Donald Trump.

The signing of the Regional Comprehensive Economic Partnership (RCEP) at a regional summit in Hanoi, is a further blow to the group pushed by former U.S. president Barack Obama, which his successor Trump exited in 2017.

Amid questions over Washington's engagement in Asia, RCEP may cement China’s position more firmly as an economic partner with Southeast Asia, Japan and Korea, putting the world's second-biggest economy in a better position to shape the region's trade rules.

Key economic data slated for release today include China Fixed Asset Investment for October, China Total Retail Sales of Consumer Goods for October and Value-Added of the Industrial Enterprises above Designated Size in China for October.