Archives of “November 2020” month

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Nikkei 225 closes higher by 2.12% at 24,839.84

  
Analysis, Global Indices

Highest close in the Nikkei since 1991

Nikkei 09-11
Equities are feeling more upbeat as investors are taking in Biden’s victory in the US presidential election. The Hang Seng is up by 1.5% with the Shanghai Composite seen up by 1.9% as we look towards the closing stages today.
Elsewhere, US futures are also pointing to solid gains with S&P 500 futures up 1.6% while Nasdaq futures are up 2.5% ahead of European trading.
The market is largely sticking with the election playbook so far, though largely ignoring any risks from a smaller stimulus or that one may not come in the lame duck session.
I reckon the market is waiting to hear from Biden this week on his plans for that, so the election relief rally remains the key focus for now at least.
Elsewhere, the dollar is hammered across the board over the past few days and that is continuing today with the greenback sitting lower alongside the yen.
EUR/USD is on the cusp of hitting 1.1900 while we are seeing some key technical levels being stretched. The Bloomberg dollar index has fallen to a fresh low since May 2018 and is on the verge of testing its 100-month moving average – first time since 2014.

Germany reports 13,363 new coronavirus cases in latest update today

  
  Analysis

There is the ‘Monday effect’ to consider though

Germany
The lower count over the weekend comes after a record 23,399 new cases were reported on 7 November. Typically the Monday count is always the lowest due to lesser testing over the weekend as we can see with 2 November and 26 October previously (⬆).
Again, it will take some time, possibly up to two to three weeks, to really get a feel of how the virus situation is progressing in Germany as ‘lockdown light’ continues to take effect.
Until then, lawmakers and policymakers will be hoping that the latest restrictions will help address the health crisis. Otherwise, this will continue to keep chipping away at economic prospects as we look towards the new year.
For the ECB, the latest set of restrictions in the euro area means that they will be stepping in with fresh measures in December to help offset the economic damage.

Japan fin min official says watching FX with a sense of urgency

  
Analysis, Forex

A Ministry of Finance official says will keep watching forex with a sense of urgency.

  • cannot comment on reasons behind FX moves
  • cannot comment on the US election impact
  • cannot comments on the level of FX itself
He can’t comment on so much!

As I have said many times before this is the sort of commentary you get out of Japanese officials when USD/JPY drops in a sharp fashion.

Oil traders note headline risk this week: Multiple OPEC+ speakers in the days ahead

  
Analysis, Crude

This year’s Adipec Conference (virtual event) is taking place  November 9 – 12.

The Abu Dhabi International Exhibition & Conference
Energy ministers from Saudi Arabia, Russia, Iraq, Iran, UAE along with OPEC’s Secretary General are all speaking. Corporates are represented also, BP and Total.
The agenda is available from this link. Some digging through the information will be required for specifics.
OPEC+ is in the midst of deciding the future of output cuts, although the pre-planned wind back of cuts from the new year does appear well and truly dead in the water given the renewed slide in demand.

This year's Adipec Conference (virtual event) is taking place  November 9 - 12.

China is beginning to hint at an exit from stimulus

  
  Analysis

Bloomberg with this report, I’d be wary of reading an exit as being imminent though.

A vice governor of the  People’s Bank of China says exit from loose monetary policy is a ‘matter of time’
  • Policy makers globally are discussing the timing of stimulus withdrawal, and the consensus is that it should be done sooner rather than later, Liu Guoqiang, vice governor of the People’s Bank of China, said Friday. “Exit is a matter of time and it is also necessary,” he said. “But the timing and method of exit need to be carefully evaluated, mainly based on the status of economic recovery.”

Check the article out here for more. But, I think this is a very early call, if that is what it is.

FT with a report on yuan bulls

  
Analysis, Forex

China’s currency has been moving higher against the USD since June.

China's currency has been moving higher against the USD since June.
The Financial Times today have a pice up on analysts bullish on the currency.
  • Analysts anticipate additional gains with arrival of more predictable White House After Joe Biden’s victory was declared on Saturday
  • “I think nearly all the volatility has been driven by the US election. It’s quite clear that a Biden White House would follow a much less aggressive stance on trade”  chief economist at Bank of Singapore
  • Deutsche Bank and Citigroup strategists wrote to clients on Friday to say it was time to re-establish long positions in the renminbi as the fog around the results of the US polls started to clear. 
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