Macro Roundup (Nov 25)

SHANGHAI, Nov 25 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar fell on Tuesday as risk appetite improved after U.S. President Donald Trump accepted the transition to a Joe Biden presidency and on optimism that COVID-19 vaccines are close to being rolled out.

Trump acknowledged that the head of the General Services Administration should go ahead with a transition to a government led by President-elect Biden, despite plans to continue with legal challenges to election results.

“We had two big risk events taken off the table, one that the Trump administration was not going to allow for an orderly transition, and also on the vaccine front … the vaccine announcements over these last few weeks has well exceeded the most optimistic health experts forecast,” said Edward Moya, senior market analyst at OANDA in New York.

The dollar index was last down 0.31% at 92.214, having reached a three-month low of 92.013 on Monday. It is holding above a key technical support at around 92, which analysts say would lead to further declines if broken.

On Wall Street, stock futures rose on Tuesday night following a banner day for three of the for major market benchmarks.

Dow Jones Industrial Average futures traded higher by 150 points, or 0.6%. S&P 500 futures climbed 0.5% and Nasdaq 100 futures advanced 0.7%.

The Dow broke above 30,000 for the first time on Tuesday, rallying more than 400 points. Tuesday’s rally put the Dow on pace for its biggest monthly gain since 1987, up more than 13%.

“The Dow passing 30,000 represents achievement of an arbitrarily-set milestone, but it also captures the sentiment of the moment for investors,” said Scott Knapp, chief market strategist at CUNA Mutual Group.

Oil rose more than 4% to its highest levels since March as a third promising coronavirus vaccine raised hope for fuel demand recovery and U.S. President-elect Joe Biden began his transition to the White House.

Brent crude gained 3.91% to settle at $47.86 per barrel. U.S. West Texas Intermediate crude settled 4.3% higher at $44.91 per barrel, its highest level since March 6.

Both benchmarks reached their highest since March 6.

AstraZeneca on Monday said that its COVID-19 vaccine was 70% effective in trials and could be up to 90% effective, giving the fight against the pandemic another potential vaccine after positive results from Pfizer-BioNTech and Moderna.

“The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

The coronavirus pandemic, coupled with the collapse of an OPEC-led output pact, sent prices crashing in March.

Gold fell to a four-month low on Tuesday and looked set to dip below the $1,800 psychological level as progress on COVID-19 vaccines and hopes for a quick transition in the White House drove investors towards riskier assets.

Spot gold dropped 1.5% to $1,807.95 an ounce, after touching its lowest since July 17 at $1,800.01. U.S. gold futures settled down 1.8% at $1,804.60.

“More optimism in regard to the economy, based on the vaccines has taken some of the safe haven status away from the gold market,” said David Meger, director of metals trading at High Ridge Futures.

“Less political concern moving forward” has also reduced the need for safe havens, Meger added.

Wall Street’s main indexes jumped after Joe Biden moved closer to take the reins of power in January with a formal nod.

Key economic data slated for release today include US Initial Jobless Claims as of November 21, US Revised annualised rate of real GDP for the third quarter, US Durable Goods Order Monthly Rate for October, University of Michigan Consumer Sentiment Index in the US for November and US Weekly Crude Oil Inventories as of November 20.