Markets Week Ahead: Dow Jones, Nasdaq, Crude Oil, OPEC, GBP/USD, Brexit Talks
Global equity markets experienced rotation-trade dynamics. Investors piled capital into more traditional industries. In the US, the Dow Jones outperformed the S&P 500 as the tech-heavy Nasdaq Composite declined. Real US Treasury yields (inflation-indexed bonds) climbed as traders felt more optimistic about the long-run path for world growth. Anti-fiat gold prices tumbled.
This occurred as Pfizer announced that its Covid vaccine was over 90% effective in preventing the disease. Growth-linked crude oil prices gained, also boosted by news that OPEC+ could further delay raising production into next year. Energy prices are eyeing a key meeting between these oil-producing nations on Tuesday for further insight.
Yet, there remain obstacles for economic activity going forward. Covid cases are rising exponentially in the US, with Europe seeing spikes. A reintroduction of isolated lockdowns could derail global growth prospects, boosting haven-linked currencies like the US Dollar and Japanese Yen. This is as policymakers in the US appear to remain stalled over another fiscal package.
Australian Dollar, Euro and US Dollar traders should watch out for speeches from chiefs of the RBA, ECB and Fed respectively ahead. For the British Pound and FTSE 100, Brexit talks continue after Boris Johnson’s top aide, Dominic Cummings, resigned. That could mean that a deal is closer than seemed. US retail sales and Chinese economic activity are also on tap. What else?
GBP eye another showdown between the UK and EU with time running out for a UK-EU trade deal.
The Australian Dollar is eyeing a push to fresh yearly highs on positive Covid-19 developments ahead of the RBA meeting minutes and employment data for October.
The US Dollar gained this past week. Covid-induced safe-haven bids on the Yen and Franc look to keep the DXY Index trading near its current 93 handle.
Crude oil price action remains mired by conflicting fundamental drivers like renewed COVID-19 lockdown measures and positive vaccine news, but outlook could stay constructive more broadly if OPEC curbs oversupply concerns.
After a week dominated by vaccine euphoria, USD/MXN looks for further guidance in economic data
Gold prices tumbled this past week as Covid-19 vaccine hopes sent real Treasury yields higher. But, rising coronavirus cases and US fiscal stimulus woes may keep XAU/USD afloat.
Global equity markets enjoyed a remarkable jump higher last week after news of a potential coronavirus vaccine worked to lift some of the stocks that the pandemic has pressured most. Can it continue?
The Dow Jones Index retreated after hitting an all-time high of 29,933 on November 9th as profit taking kicked in. Bearish momentum appears to be prevailing with an eye on 28,000 for an immediate support.
After Monday’s heavy sell-off, gold is making baby steps higher but resistance lies ahead and further gains may prove difficult.
USD/JPY explosion off the lows has a familiar level of resistance in play within the context of a generally negative trend.
Hope was the big item to start the week and it couldn’t come at a better time as Europe continues to struggle with Covid.
A multi-week rally in Sterling remains vulnerable as Cable stalls at key technical resistance. Here are the levels that matter on the GBP/USD weekly technical chart.
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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