Archives of “November 2020” month

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European shares end sharply higher. Up 5 of the last 6 trading days

  
Analysis, Global Indices

German DAX surges by 5.2%, France CAC up 7.6%.

The major European indices are closing sharply higher. The gains are the 5th in the last 6 trading days.   Spain’s Ibex leads the way with a gain of over 8%.

The provisional closes are showing:
  • German DAX, +5.2%
  • France’s CAC, +7.6%
  • UK’s FTSE 100, +4.9%
  • Spain’s Ibex, +8.6%
  • Italy’s FTSE MIB, +5.5%
In the European debt market, yields were sharply higher as well as investors push up yields in reaction to a potential Covid vaccine (and rebounding economies).

In other markets:

  • spot gold is trading down $97 or -4.98% $1854
  • spot silver is trading down $1.95 or -7.61% at $23.63
  • WTI crude oil futures are surging by $3.19 or 8.59% at $40.35

More on Pfizer’s covid-19 vaccine

  
Analysis, US Market

Some of the details of the study from Pfizer and BioNTech

Pfizer NYSE
  • Study enrolled 43,538 participants and had no safety concerns
  • 94 participants contracted covid-19
  • Vaccine candidate was found to be more than 90% effective
  • Trial will continue until 164 confirmed cases
  • News release
Albert Bourla, Pfizer Chairman and CEO, said this was the most important medical discovery in 100 years. I’m not going to be challenge that statement but given the market’s reaction, it’s certainly the most important medical news in a long time.
“Today is a great day for science and humanity. The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19,” said Dr. Albert Bourla, Pfizer Chairman and CEO. “We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen. With today’s news, we are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis. We look forward to sharing additional efficacy and safety data generated from thousands of participants in the coming weeks.”
The math of the study is simple: 94 cases in trial participants, about 9 of the vaccine recipients got covid-19, about 85 placebo recipients got it. That’s tough math to argue against.
Meanwhile, the vaccine news keeps on coming with Novavax saying its covid vaccine has gotten the FDA’s fast track designation.

USD/JPY climbs by over 1% as risk rally sinks the yen

  
Analysis, Forex

USD/JPY moves back above 104.00 to near 104.50 currently

USD/JPY H1 09-11

The yen is proving to be the biggest loser as the market continues to party from the election and vaccine euphoria in the past half-hour. The dollar itself is weak across the board but USD/JPY has climbed by over 1% during the time.
The pair has broken back above 104.00 from around 103.70 earlier and is now trading closer towards 104.50 upon breaking its key hourly moving averages.
Hence, buyers are now back in near-term control. So much for the potential for an immediate drag towards 102.00 post-election.
The key thing to watch for the pair as risk remains the main narrative is Treasury yields.
10-year yields have shot up by over 11 bps to near 0.93% and that is lifting yen pairs across the board as we look towards North American trading.
USGG10YR

Risk trades soar on vaccine optimism

  
  Analysis

The dollar is back down near the lows for the day again

The market is getting a real jump from the vaccine story here, and that is leading to a rousing reception in risk trades as US futures soar higher on the day while bonds sell off.

US futures are pointing to fresh all-time highs at the open later, with airlines and leisure stocks getting a major boost on the news. Meanwhile, 10-year Treasury yields have jumped up by over 9 bps to back above 0.90%:
USGG10YR
Elsewhere, oil is up by over 7% in a push back above $40 from around $38 earlier.
In the currencies space, this is seeing the dollar slump across the board alongside the yen. EUR/USD is back up near 1.1900 while AUD/USD is pushing gains of over 0.8% to 0.7320. Meanwhile, USD/JPY has jumped from 103.70 to 104.30 currently.
The Pfizer story reveals that they may push for emergency-use and distribution by the year-end and that is indubitably great news in addressing the health crisis, especially with record-breaking virus cases across the US in the past week.
This could prove to be a game-changer in the battle against the virus, but we’ll see once more details surface on the distribution process and how it will be handled.
There’s plenty of optimism surely to take away from the story but as gains start to look frothy, be wary of squeezes in profit-taking activity.

Germany DAX erases lockdown drop with a 5% jump so far today after the Pfizer vaccine story

  
Analysis, Global Indices

The market has gone ballistic on the Pfizer vaccine story

DAX

European equities are soaring across the board as gains push to over 5% now and we are seeing that translate to heavy losses for the yen in particular, with investors rotating away from bonds and piling into risk assets.
The DAX has pretty much erased the drop from lockdown fears last month as gains now stretch to almost 5.5% on the day. Madness.
DAX

Israel & UAE deal and its implications on the economies of the Middle East

  
  Analysis

A closer look at the historic agreement between Israel and the UAE

The October 23rd normalization agreement between Israel and the United Arab Emirates made the UAE the 3rd Arab country (after Egypt in 1979 and Jordan in 1994), and the 1st country in the Persian Gulf, to agree to normalized ties with the Jewish state.

The normalization agreement, otherwise known as The Abraham Accords, will encourage the UAE and Israel to open their economies to each other and permit the movement of “goods, services and investment” over their borders.

After the agreement was signed, UAE-based Apex National Investment and Israel’s TeraGroup signed the very first exchange participation of understanding, to direct joint examination and studies that could prompt the creation of COVID-19 testing units.

Last May, the UAE’s Etihad Airways made a historic first-time departure from Abu Dhabi to Tel Aviv. The flight was said to carry humanitarian aid to Palestinians.

With normalized relations between the two nations, both economies are expected to see a significant lift. There may be updates soon on lucrative oil deals, Emirati tourism packages that encourage Israelis to winter vacations in a warmer climate, education exchanges as well as employment opportunities for both Israelis and the Emirates.

The exact plans are expected to unfold over the following few weeks as both countries get ready to open their diplomatic embassies and begin bilateral negotiations.

Beyond the domestic borders, the agreement has critical regional ramifications. Iran, Turkey, and the Palestinians have censured the UAE for normalizing relations with Israel. Turkish President Erdogan took steps to cut discretionary ties with the UAE. (more…)

Eurozone November Sentix investor confidence -10.0 vs -15.0 expected

  
  Analysis

Latest data released by Sentix – 9 November 2020

  • Prior -8.3

Investor morale may not have declined as sharply as estimated but the pullback since September continues to hint at waning optimism over the euro area economy.

With tighter restrictions being introduced, that will weigh on Q4 prospects and that is reflected by the reading above. The fear now is that such measures may be prolonged into next year to keep the health crisis in-check, in turn weighing on the economy for longer.
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