Macro Roundup (Nov 23)

Published: Nov 23, 2020 08:38 (GMT+8)
The dollar on Friday rose against major currencies such as the euro and yen, with traders consolidating positions amid competing forces that pull the currency in different directions: the surge in virus cases, on the one hand, and positive vaccine news, on the other.

SHANGHAI, Nov 23 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar on Friday rose against major currencies such as the euro and yen, with traders consolidating positions amid competing forces that pull the currency in different directions: the surge in virus cases, on the one hand, and positive vaccine news, on the other.

The possible resumption of U.S. stimulus talks for COVID-19 relief has also weighed on the dollar as a safe haven. Republican and Democratic senators agreed on Thursday to revive those discussions.

Overall, the greenback ended the week on a loss against a currency basket. The week started off on a negative note for the dollar with positive news on a vaccine for COVID-19, but the market has since moved back and forth between focusing on coronavirus cases and the virus drug.

Pfizer Inc said it had applied for emergency use authorization in the United States for its COVID-19 vaccine.

“We think we are in the early stages of a recovery in the global economy and trade from the shock of the pandemic and this will further” weigh on the dollar and support the euro,” Jonathan Petersen, markets economist, at Capital Economics, said.

On Wall Street, futures contracts tied to the Dow advanced 40 points for a gain of 0.14%. S&P 500 futures rose 0.15%, while Nasdaq 100 futures advanced 0.25%.

“Stocks this week will trade on lockdown concerns and rising cases, but could see a boost into early December as the optimism around a near term, stopgap stimulus package grows,” said Shannon Saccocia, Chief Investment Officer at Boston Private. “Overall, the push and pull between tech stocks and cyclicals will likely continue through the next couple of weeks, and we could see some tough days as economic data is released that reflects the deterioration in consumer spending we are currently experiencing.”

All three major averages finished Friday’s session lower, while the Dow and S&P 500 also posted a loss for the week, falling 0.73% and 0.77%, respectively, for their first negative week in three. The Nasdaq Composite managed to eke out a 0.22% gain for the week, marking its second straight week of gains.

The move lower came as Covid-19 cases continue to rise, with the U.S. reporting a record-high spike of more than 195,500 new cases on Friday. Public health officials have warned that Thanksgiving celebrations on Thursday could further exacerbate the outbreak.

Oil prices firmed on Friday, and posted their third consecutive weekly rise, buoyed by successful COVID-19 vaccine trials. But renewed lockdowns in several countries to limit the spread of the virus capped gains.

Prospects for effective COVID-19 vaccines and hopes OPEC and its allies will keep production in check have bolstered oil markets this week.

Brent crude futures were up 59 cents, or 1.3%, at $44.79 per barrel. The WTI contract for December, which expires on Friday, settled 41 cents, or 0.98%, higher at $42.15 per barrel.

Gold edged higher on Friday after U.S. Treasury Secretary Steven Mnuchin signalled that negotiations on stimulus measures will continue, boosting the metal’s appeal as a hedge against likely inflation.

Spot gold rose 0.3% to $1,872.95 per ounce, but was down 0.8% for the week. U.S. gold futures settled up 0.7% to $1,872.40.

Mnuchin said he and White House Chief of Staff Mark Meadows would be speaking on Friday with Republican congressional leaders on negotiations with Congress on more economic support.

“The thought of stimulus talks moving forward once again has supported gold as we realise central bank liquidity and fiscal stimulus measures continue to be a driving force behind this market,” said David Meger, director of metals trading at High Ridge Futures.

Key economic data slated for release today include Euro Area Manufacturing PMI for November, IHS Markit US Manufacturing PMI for November and the IHS Markit US Services PMI for November.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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