Weekly Market Review December 14-18, 2020

December 17, 2020
Stock market indices continue to rise despite the deteriorating epidemiological situation in several countries. There are several sources of increased risk appetite:
Weekly Market Review December 14-18, 2020

Stock Markets Review:

Start of vaccinations in the USA. On Friday, the US Food and Drug Administration granted emergency use authorization for the vaccine developed by Pfizer and BioNtech, source: FDA.Gov. Vaccine shipment from Pfizer’s Michigan plant began over the weekend, and vaccinations began on Monday.

Healthcare workers and the elderly people will be the first to be vaccinated. According to the chief adviser on vaccination Dr. Moncef Slaoui, 100 million US citizens are expected to be vaccinated by the end of March. On December 17, the FDA’s advisory board meeting on a vaccine developed by Moderna will take place.

Expectations of the adoption of a new package of economic stimulus in the United States. On Monday, 908 billion coronavirus relief package was introduced in the US Congress. This package is going to be divided into two packages. The first package – worth $ 748 billion – will include small business assistance, unemployment benefits and funding for vaccine transportation.

The second package – in the amount of 160 billion – provides assistance to states and funding business liability protection measures. Additionally, Congress has to pass a 1.4 billion government funding bill this week. If bill is not passed by Friday, a partial shutdown will occur.

Japan has adopted a $ 708 billion economic stimulus package that includes measures to boost employment and support affected industries, as well as initiatives to reduce carbon emissions and digital transformation of the economy.

  1. Stimulating monetary policy of central banks.

Currency Markets Review:

After reading this markets review, you might like to know which are the top 20 most traded currencies!

The weakening of the dollar continues amid low demand for risky assets. On Thursday, the ECB increased the total size of the quantitative easing program by 500 billion euros to 1.85 trillion euros and extended it by nine months until March 2022.

This came after EU leaders finally agreed to provide 750 billion euros from the coronavirus relief fund, source: ec.europa.eu. Ending months of standoff with Poland and Hungary.

The pound has regained its position due to the growing prospects for reaching a trade agreement with the EU. British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen have agreed to continue negotiations after Sunday’s deadline, source: The Guardian.

Commodities Markets Review:

OPEC + cut its forecast for oil demand in the first quarter by 1 million barrels per day. Also, OPEC said that the volume of oil production in November increased by 710 thousand barrels, source: CNBC. Due to the recovery of supplies from Libya. However, oil price reached new 9-month high amid vaccine news and improved prospects for a global economic recovery.

Main events of the current week

On Tuesday, data on industrial production in China, unemployment rate and average hourly earnings in the UK will be presented.

On Wednesday, data on UK CPI, manufacturing and service PMIs, German manufacturing PMI, US retail sales, Canadian CPI, New Zealand GDP and crude oil inventories will be released. Fed will hold a monetary policy meeting.

On Thursday, data on changes in employment in Australia, Eurozone CPI, US building permits and initial jobless claims will be published. There will also be meetings of the Bank of England and the National Bank of Switzerland.

Retail sales in the UK and Canada and the German business climate index are due on Friday. There will also be a meeting of the Bank of Japan.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.

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Categories: Analysis

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