[Market Review]
The US index broke the 90 mark for the first time in more than two years. Congressional negotiators are “close” to reaching agreement on a $900bn COVID-19 aid package, according to US lawmakers and aides. In an effort to give administration officials more time to pass the deal, Senate Majority Leader Mitch McConnell said Congress would likely need to work over the weekend and extend short-term spending legislation to avoid a government shutdown as a one-week stopgap spending bill expires at midnight on Tuesday. Good news about vaccines is also coming. It’s reported that the FDA said the Pfizer vaccine has additional doses and will be expanded. Meanwhile, the FDA is expected to formally approve an emergency use license for Moderna’s COVID-19 vaccine later Friday. The dollar index.DXY tumbled this week and broke the 90 level for the first time in more than two years on good vaccine news and expectations of fiscal stimulus.
Golden week up more than 40 dollars. Gold surged more than $40 this week, hitting a one-month high of $1,896.11 an ounce after the Federal Reserve reaffirmed its commitment to support the economy and growing optimism that Congress would soon pass a bail-out bill.
Silver is up a strong 7.7% this week. Along with gold, silver has enjoyed a big rally this week, climbing as much as $26 from around $24 and gaining 7.7% in the week.
Another “deadline” for Talks between Britain and Europe. Then there’s the pound. The pound rose against the dollar for a fourth day in a row following positive signs in Brexit negotiations earlier this week. That may not be the case for sterling, however, as there are fresh signs of tension in the brexit trade talks. The EU has set another “deadline” for negotiations. The European Parliament has set this Sunday as the deadline for trade talks to leave the EU. The last obstacle to a deal is the issue of fishing rights. Britain again said the EU was unlikely to reach a deal without concessions. The Bank of England said on Thursday it was prepared to tolerate a spike in inflation if Britain left the European Union in two weeks’ time without a deal, but would keep its stimulus measures in place as it enters the final stages of trade deal talks with the European Union.
Three factors underpin the euro’s strength. The euro has also had a strong week, stabilising at the 1.22 mark. This can probably be attributed to three factors. First, the weaker dollar continues to support the euro; In addition, sterling earlier climbed, also led European currencies higher. The euro has also been helped by a slew of upbeat economic data this week.
American oil broke the $48 barrier. In the oil market, U.S. oil rallied 3.6 percent this week to above the $48 level as EIA crude oil inventories fell sharply, good news on vaccines continued to boost demand, and expectations of U.S. economic stimulus increased, hurting the dollar, even as both Opec and THE IEA cut their oil demand forecasts.
Bitcoin topped $23,000. Finally, take a look at Bitcoin. The wild ride continues, with Bitcoin now above the 23,000 mark. Bitcoin’s rally has been driven largely by institutional buying. A recent report from pricewaterhousecoopers showed that more institutional investors are entering the cryptocurrency market in 2020. Some of the world’s best-known public companies are also betting on bitcoin. In addition, bitcoin’s rise is widely believed to be influenced by the epidemic and currency “release”. In addition, the long-term decrease in the supply of bitcoins after halving has also affected the price of bitcoins.
▼ Bond market
Overnight, Chinese 10-year yields fell 0.11 per cent, US 10-year yields rose 1.62 per cent and US three-month yields fell 5.64 per cent.
▼ Stock market
Overnight, U.S. stocks closed up, with the S&P 500 up 0.58%, the NASDAQ up 0.84% and the Dow up 0.49%. By this morning, The Chinese stock market had opened mixed, with the Shanghai Composite index down 0.13%, the Chinext index up 0.08% and Hong Kong’s Hang Seng index down 0.1%.
[Risk Warning]
Euro: Fed resolution boots on the ground in euro or looks on 1.25
Commerzbank notes that the market is certain that the Federal Reserve will not enter a rate hike cycle in the near term, which is a long-term negative for the dollar. As a result, Commerzbank believes that after the market uncertainty is removed, the channel for further appreciation of the euro has been opened, and the target may be seen above 1.25.
Sterling: Sterling upside space or open above target 1.43
Commerzbank believes further upside for sterling has been opened up. The fed’s future combination of zero interest rates and unlimited QE will continue to weigh on the DOLLAR index, while a global recession next year will be the first to weigh on European risk currencies. If the UK and the EU strike a trade deal, the pound could move up to 1.4377. But if there is still no agreement by the end of the year. Sterling will come under short – term downward pressure and could fall to 1.2855 after losing 1.30.
Crude oil: Demand for crude oil rises to $50 on U.S. oil prices
Us inventories fell more than expected and India’s three refineries were running at almost 100 per cent capacity, indicating that demand for crude oil remains strong and that the US looks set to continue with more monetary and fiscal stimulus, putting pressure on the dollar and pushing most commodity prices higher. Td Securities expects us oil to rise towards $50 in the long term.
【 Key Foresight 】
11:00 The Bank of Japan may expand its corporate aid program
The Bank of Japan will announce an interest rate decision. Japanese business sentiment improved for the second quarter in a row, according to a bank of Japan survey released on Monday, and the recovery is encouraging. But the recent outbreak backlash, as companies cut their capital spending plans for the current fiscal year, has raised the prospect that Japan’s recovery will be fragile.
Sources said last week that the bank of Japan may expand its corporate financing assistance program. The measures are now set to expire in March and could be extended for at least six months, with a decision expected this week.
On this basis, we believe that the bank of Japan may expand its corporate financing assistance program, but expect no change in interest rates or government bond yields. With the bank of Japan still battling the outbreak, it is expected to keep policy loose.
14:30 Haruhiko Kuroda will stress the maintenance of ultra-loose policy
That will be followed by a conference by Bank of Japan Governor Haruhiko Kuroda. At the end of last month, Kuroda said Japan’s economy is recovering, but remains in a serious state due to the impact of the outbreak. Downside risks to the economy and inflation. As a result, the boj is determined to keep monetary policy loose. It will not hesitate to ease more if needed. In view of this, we believe that Kuroda will continue his previous position, emphasizing that the impact of the epidemic on the economy is uncertain and that easing will be intensified if necessary. That may put some pressure on the yen.
In addition, some other data to watch today are:
15:00 German November PPI rate before 0.1% forecast 0.1%
15:00 UK Retail sales forecast for The November quarter revised forward 1.2% monthly sales forecast -4.2%
17:00 Germany’s December IFO Business Climate index forecast before 90.7 90
17:00 The euro zone’s current account before the October quarter adjustment was worth 25.2 billion euros
19:00 UK CBI industrial order difference forecast -40 Forecast -34
Canada October retail sales monthly forecast 1.1% forecast 0.2%
21:30 US Q3 CURRENT account pre-value – $170.5 billion forecast – $189 billion
The Conference Board’s forecast of a 0.7 percent monthly leading indicator for November was 0.5 percent
The total number of oil Wells drilled in the U.S. for the week ended Dec. 18 stood at 258 at 02:00 ON Saturday
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