The main driver of the stock market growth is the news about the results of vaccine trials. Following Pfizer, interim data on vaccine efficacy were presented by Moderna. The company said on Monday that its vaccine prevents 94.5% of COVID-19 infections. This news boosted demand for risky assets, despite the worsening epidemiological situation. A record number of new cases of coronavirus infection was recorded in the United States and Japan.
Asian stocks rose on Monday amid news that 15 countries (China, Australia, New Zealand, South Korea, Japan, and ASEAN countries) have signed a comprehensive regional economic partnership agreement, under which a free trade zone between these countries is created. The growth of the indices was also supported by positive data on industrial production in China and the GDP of Japan.
The dollar remains under pressure amid falling demand for safe-haven assets. EUR/USD resumed its growth after a downward correction. The pound also strengthened, despite failure to reach a trade agreement between the EU and UK before the November 15 deadline. However, negotiations will continue this week.
The Turkish lira strengthened significantly last week as a result of reshuffles at the central bank and Turkish finance ministry. Market participants expect that the new head of the central bank will raise the interest rate, which could contain the devaluation of the lira.
Oil price rose on news of the vaccine’s effectiveness, as well as on expectations that OPEC + countries would decide to postpone the increase in oil production quotas. On Tuesday, a meeting of the OPEC + ministerial committee will take place.
Soybean futures hit a 4-year high and corn futures hit a one-year high as the US Department of Agriculture said that stockpiles this marketing year will fall to their smallest in 7 years due to a decline in US harvest expectation and strong export to China.
Main events of the current week
- On Tuesday, data on US retail sales will be presented and minutes of the meeting of the Reserve Bank of Australia will be published. ECB President Christine Lagarde and Governor of the Bank of England Andrew Bailey will speak. Walmart will report earnings before the market opens and NIO will report after the market close.
- On Wednesday, consumer price indices in the Eurozone, the UK, and Canada will be presented, as well as data on the number of building permits issued in the US and crude oil inventories. Nvidia will present an earnings report after the market close.
- On Thursday, data on employment change in Australia, US jobless claims, existing home sales, and Philadelphia Fed manufacturing index will be published. Christine Lagarde will deliver a speech.
- Data on retail sales in Australia, the UK, and Canada will be released on Friday. The People’s Bank of China will decide on the loan prime rate.
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