Slowing Down Rally
Global stock markets rally decelerated on Monday on new US-China renewed tensions as the US prepares to impose new sanctions on some Chinese officials. On Friday, the US economy gave an alarm signal as created 245K jobs much lower than the expected 469K, this pointed out the need for a better than the $500 billion stimulus-package some Republican have been trying to sell and makes the $900 Billion-proposal more likely.
Last week, the UK was the first country to approve the coronavirus vaccine followed by Bahrain, and this week the US is expected to give the green light to deploy the vaccine on Friday, aiming that every American to be able to have the vaccine by Q2-2021.
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Change % | |
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+0.6% | |
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+0.6% | |
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+0.3% | |
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+0.5% | |
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+0.5% | |
|
+1.1% | |
|
+0.9% |
EUR/USD and Main FX Markets
The greenback price fell last week on the back of weak US job data, therefore more stimulus is expected from the Fed especially after Powell's statement that the central bank would tolerate increases in the inflation rate until the employment target is achieved. At the start of December, the US dollar index broke below the September 1 low at 91.71 and edged lower eyeing a test of 89.45.
The Euro benefited from the better-than-expected manufacturing PMI numbers 53.8 with a weaker US Dollar price. The EUR/USD hit on Friday an over two and a half years high at 1.2176 then retreated, a close above the high end of the technical resistance at 1.2148 could send the price towards the monthly resistance level at 1.2355 (November 2014 low).
The British Pound investors' eyes are on the last attempt of the EU-UK negotiators to reach a fair deal this week. The GBP/USD opened this week with a downward gap at 1.3414 eyeing a test of the low end of the current trading zone 1.3185 – 1.3460.
Gold and Oil
The Oil upward trend remained in place driven by an OPEC+ production deal and hopes that the US stimulus package combined with the coronavirus vaccine rollout could boost demand in 2021. Nonetheless, Libyan output increase and the possible incorporation of Iranian oil under Biden’s presidency keeps the lid on the Oil price. The Brent Crude technical outlook remains positive while above $46.47, a close below that level changes it to neutral.
The Gold benefited from a weaker US Dollar and rallied above $1,796 eyeing a test of $1,861, a close above this level changes the precious metal outlook from negative to neutral and may cause a rally towards $1,921/oz.
Looking Ahead
Not much today on the economic calendar, investors await the Canadian Ivey PMI number of November at 4:00 PM (GMT).
Sources: Bloomberg, Reuters