Macro Roundup (Dec 10)

Published: Dec 10, 2020 08:59 (GMT+8)
The dollar rose in choppy trading on Wednesday for a fourth straight session, as selling momentum eased with stocks under pressure, but positive vaccine news and prospects of more U.S. fiscal stimulus next year should keep pressure on the greenback.

SHANGHAI, Dec 10 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar rose in choppy trading on Wednesday for a fourth straight session, as selling momentum eased with stocks under pressure, but positive vaccine news and prospects of more U.S. fiscal stimulus next year should keep pressure on the greenback.

On Wall Street, U.S. stock index futures were slightly higher in overnight trading on Wednesday as investors continued to assess progress on additional stimulus measures, as well as developments on the Covid-19 vaccine front.

During regular trading hours on Wednesday stocks rose to record highs. But the gains were ultimately short-lived, and the major averages wound up closing in the red.

The Dow closed 105 points lower for a loss of 0.35%. The S&P 500 fell 0.8%. The Nasdaq Composite pulled back by 1.9% for its worst day since Oct. 30. The tech-heavy index also snapped a four-day winning streak.

The broader market’s move to the downside was led by the technology sector, with chip stocks in particular registering weakness.

A three-hour meeting between U.K. and European Union leaders on Wednesday evening failed to break an impasse in Brexit trade talks. British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed that a firm decision should be made by Sunday about the future of the talks, media reports said citing a senior Downing Street source.

The U.K. left the EU in January but agreed to keep the same standards and regulations until the end of the year. That was intended for both sides to have time to develop new trading arrangements. The transition period is due to end in three weeks and there are growing concerns that a new agreement may not be ready by then.

The U.S. Food and Drug Administration (FDA) said Tuesday that data from Pfizer’s coronavirus vaccine trials was consistent with recommendations put forth by the agency for an emergency use authorization. It also said the vaccine was highly effective and did not raise any specific safety concerns. The FDA is holding an advisory meeting Thursday to review Pfizer’s vaccine.

Oil prices were little changed on Wednesday as investors weighed an unexpected jump in U.S. crude stockpiles against optimism that a fast rollout of a coronavirus vaccine would fuel a recovery in global oil demand.

Prices fell 1% earlier in the session as data showed U.S. crude inventories rose by 15.2 million barrels to 503.2 million barrels last week, according to the Energy Information Administration (EIA).

U.S. net imports of crude oil rose by 2.7 million barrels per day last week, the biggest increase on record, as exports plunged.

However, the advent of mass inoculations in Canada and the United Kingdom and the prospect of the U.S. Food and Drug Administration approving a coronavirus vaccine pushed markets higher following the report.

Gold retreated more than 2% on Wednesday as optimism driven by more progress on the COVID-19 vaccine front bolstered hopes for a smoother economic recovery.

Spot gold was down 2.4% at $1,827.26 per ounce. On Tuesday, gold hit its highest since Nov. 23 at $1,875.07. U.S. gold futures settled down 1.9% at $1,838.50.

“There is the anticipation that some of the chaos that has resulted from the pandemic is going to subside (now that) they are beginning to disperse the vaccine in some parts of the world,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

Key economic data slated for release today include British industrial output and GDP for October, US initial claims for unemployment benefits in the week ended December 5 and unadjusted consumer price index 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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