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Weekly Market Review November 30 – December 4, 2020


November 30, 2020
Moderna said on Monday that its vaccine is 94.1% effective and 100% effective in preventing severe cases of coronavirus infection.
Weekly Market Review November 30 – December 4, 2020

Stock market

Stock market indices finished last week with growth, the main drivers of which were expectations that coronavirus vaccine will be granted emergency use authorization, Donald Trump’s consent to the transfer of power, as well as expectations of additional monetary stimulus from the Fed. Moderna said on Monday that its vaccine is 94.1% effective and 100% effective in preventing severe cases of coronavirus infection.

The company also announced that it submitted an emergency use authorization request to the Food and Drugs Administration. Previously, such an application was submitted by Pfizer, the decision on which is scheduled for December 10.

On Thursday, US President Donald Trump said that he would leave the White House if the Electoral College votes for President-elect Joe Biden, despite having repeatedly spoken about massive electoral fraud.

The stock market was also boosted by the news of Janet Yellen’s nomination for the US Treasury Secretary’s post. Yellen headed the Fed from 2014 to 2018 and was a supporter of massive monetary stimulus and a low-interest rate, which suggests that she will advocate massive fiscal stimulus in her new position.

Currency market

The dollar index hit a 31-month low due to lower demand for safe-haven assets fueled by vaccine optimism and increased monetary stimulus expectations from the Fed. Against this backdrop, the euro reached the psychological level of 1.20, and the New Zealand dollar reached a new 1.5-year maximum.

The pound is consolidating amid uncertainty over Brexit. There is only a month left before the UK’s exit from the EU. However, the parties have not yet been able to reach a trade agreement due to disagreements over fishing regulation, the provision of government subsidies, and the settlement of disputes.

Commodities

The gold price hit a 5-month low due to lower demand for safe-haven assets amid positive expectations related to a coronavirus vaccine’s regulatory approval.

Oil price hit an 8-month high, boosted by upbeat vaccine news. The OPEC + summit will occur on Monday and Tuesday, at which decision will be made on production cuts. The most likely scenario is that OPEC+ will postpone the increase in production by three months.

Main events of the current week

On Tuesday, data on Manufacturing PMI of China, Germany, the UK, and the United States will be presented, German unemployment change, consumer price index in the Eurozone, and Canada’s GDP. The Reserve Bank of Australia will hold a monetary policy meeting, and Fed Chairman Jerome Powell will testify in Congress. Results of OPEC + summit will also be announced.

Australian GDP, ADP nonfarm employment change, and crude oil inventories are due on Wednesday. Jerome Powell will testify.

On Thursday, data on US and UK Services PMI and US jobless claims will be published.

On Friday, data on retail sales in Australia, UK Construction PMI, Nonfarm payrolls, and the unemployment rate in the US, and employment change in Canada, will be presented.


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Categories: Analysis

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