Key Points:
US coronavirus daily cases escalate to almost 200,000
Risk sentiment improves to close out the week
US consumer confidence misses expectations
US consumer confidence slipped to 77 from 82 expected but was largely shrugged off as markets still try to digest the potential vaccine news and how long it will take to distribute. This as the US punches out almost 200,000 case per day now whereas the day before election was just under 100k, so a huge jump and a worrying stat for markets to digest. How long before lockdowns are reintroduced in the US to assist the healthcare sector which in some quarters is struggling more than the initial wave in March? Not to be deterred the S&P500 closed at a record high and the Russell gained over 2% with the Dow Jones and Nasdaq also up on the day. Gold rebounded to 1887 and WTI lost $1. So risk is on! The USD suffered again with EUR looking firm on 1.18 now. 1.1880/90 the hurdle to potentially open up a test of 1.20. AUD looking sick Thursday into 0.7220 bounced back to close at 0.7265 above last week’s key support at 0.7255/60 and the 200HMA at 0.7237. A big week ahead for AUD central bank speak with Lowe, DeBelle & Kent all speaking. Lowe starts tonight at 1940AEST. The RBA have been open about their thinking recently regardless of whether you agree with it so it’s hard to see much volatility arising from any of these speeches. Tuesday will see the last meetings minutes released but Thursday we get the employment data which will shed light on the recovery and more likely to be the key risk event. For GBP possibly a bigger week ahead as Brexit talks continue and GBP may get a lift on the open today with the departure of two of Boris Johnson’s more anti-EU advisers. Both Cain and Cummings were key drivers behind the vote Leave campaign and it may lead analysts to think that the UK will soften it’s recently aggressive stance towards negotiations. Only time will tell. Four and half years and counting! We’re due Chinese retail sales and industrial production data today to maybe stir some life into the market but reaction is likely to be muted. Keep an eye on US yields this week as we have a plethora of Fed speakers that may offer more than usual in light of the recent news around the vaccine and what that may mean to the US economy in 2021.