Daily Market Update - December 4 European Session

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Daily Market Update – December 4 European Session

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Bid for safe-haven currencies fell this week thus causing plunging dollar and yen. The US stock markets hit a fresh high as well as Bitcoin. Meanwhile, Brexit deal talks will continue on Monday. Covid vaccination is expected to start in the UK and US in December as death tolls hit 1.5 million. Here is the end of the week market highlight with employment data in the US and Canada taking the spotlight.

Brexit Update

According to a BBC reporter, an EU source said Brexit is ‘extremely sluggish’. The EU chief negotiator Barnier will update the EU27 envoy on Friday. Therefore a deal is not likely today. Talks are to continue on Monday. Also, several reports said it’s up to the UK to compromise some of its ground to make it work. The major barriers include fishing and level playing ground on governance and standard. 

Covid 19 development

According to John Hopkins, covid19 dead toll surpasses 1.5 Mln. Califonia to impose stay-home orders. Italy set to enforce new restrictions between December 21 and January 6.

Vaccines: Good development on vaccines as Moderna reported that phase 1 vaccine participants retained high levels of antibodies after 119 days. The firm thus projected 100M-125M doses available for global use in the first quarter of 2021.  

Pfizer also showed confidence that its supply for 2021 would reach 1.3 billion doses. However, the firm has cut down its December doses due to supply chain issues. 

Meanwhile, in the UK, vaccine injection will start on December 9. The country has made a priority for distribution with the first 10 million doses for the elderly and health workers. The US will also commence vaccination in December. 

Stimulus

US $980 billion stimulus package will be signed by President Trump after approval from the Senate. The House will also vote on a deal before December 11. 

Geopolitics

The US Department of defense has blacklisted some Chinese companies believed to have ties with the Chinese military. Also, the US commerce department considers blocking cloud companies from China, Russia and Iran. Major risk-off concerns for traders later in December or January.

OPEC+

OPEC+ group has reached an agreement to increase production by 500k BPD from January. Covid19’s second wave has not had as much impact as the first. Energy prices keep soaring with the expectation that partial lockdown in some countries will end by January as vaccination rolls out. The ministers also hope that will be the first step toward a projected 2mln BPD output by April. 

Macroeconomics

It’s a big day for the currency market. The US and Canadian labor departments will release the November data. In the US, the market consensus expects 475k against October 638k. However, the unemployment data is expected to fall to 6.8% from 6.9%. In Canada, a drastic negative employment change is expected 22k against 83k. Market consensus also estimated a higher unemployment rate at 9%. Traders should watch out for big deviations away from expectations.

FX

The dollar falls lower as investors prefer riskier assets. The DXY hits 90.5 on Thursday. After a minor bounce to 90.8, the currency index is off to retest 90.5 ahead of the very important employment data. 

EURUSD remains firm after hitting the peak of the week at 1.2175. The currency pair continues to flow on the opposite side of the DXY.

GBPUSD hit 1.35 on Thursday from 1.329. However, the currency pair was rejected at 1.35 and has now fallen to 1.345 at the start of the London session due to the Brexit deal disappointment.

USDCAD plunged further as CAD benefits from bullish oil prices while the dollar hit fresh lows.

AUDUSD and NZDUSD at 30 months high as investors prefer riskier currencies.

USDJPY fell on Thursday after an earlier surge. The safe-haven nature of the dollar and yen puts the currency pair in a bearish range. 

Commodities

Gold is up by over 3% this week. However, the commodity is close to the strong resistance zone at 1850-1840. Silver up by nearly 6.5% this week as well. Oil prices reach new highs since the pandemic. WTI and Brent now trade at over $46 and $49 respectively – highest since February/March.

Stocks

Wallstreet up by 1% after a sharp fall at the start of the week. Fresh highs have already been achieved this week. Further rallies incoming as risk-on persists. UK 100 stock index has done better with a 2% gain after positive vaccines report. However, European stocks are sideways this week while Chinese and Asian stocks have done even worse. 

Cryptos

Bitcoin hits a fresh all-time high this week on some exchanges. The premier digital asset is up by over 9% this week and just shy of the $20,000 mark. The altcoins also maintain bullish traction with a significant surge to their highest prices since the first half of 2018. However, many still have a long way to go before hitting their respective all-time highs. Ethereum has covered about 40% of the ground while many others have so far done far less. 

Disclaimer: This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. This communication has been prepared based upon information, including market prices, data, and other information, believed to be reliable; however, TigerWit does not warrant its completeness or accuracy. Trading CFDs involve risk and can result in loss of capital.

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