Daily summary: Vaccines hope extends stocks rally

6:09 PM December 1, 2020
  • Pfizer(PFE.US) and BioNTech (BNTX.US) requested regulatory clearance for their vaccine in Europe
  • OECD sees brighter economic outlook
  • Stocks in the US Hit All-time High
Major European indices finished first trading session of December in upbeat moods. The DAX 30 rose 0.7% while other bourses gained between 0.3% and 2%. News that pharmaceutical giant Pfizer and its German partner BioNtech have applied to European authorities for authorization to rollout their Covid-19 vaccine lifted market sentiment. Meanwhile, the China Caixin/Markit Manufacturing PMI for November rose to 54.9, the highest reading in a decade, which suggests that the Chinese economy continues to recover strongly from the pandemic.  On the Brexit front, both sides are still unable to reach a deal. EU is willing to use contingency measures on Wednesday or Thursday, if it is unable to reach an agreement by then, Reuters reported citing a senior EU diplomat. Meanwhile OECD expects that global economy will rise 4.2% next year, rebounding from a 4.2% contraction in 2020 Still, delays to vaccination deployment, difficulties controlling new virus outbreaks and failure to learn lessons from the first wave could weaken the outlook. OECD advised governments to maintain exceptional fiscal support and ensure that the money reaches those who need it the most. According to new forecasts US economy will expand 3.2% next year (-3.7% in 2020), China 8% (1.8% in 2020), the UK 4.2% (-11.2% in 2020) and Germany 2.8% (-5.5% in 2020). On the coronavirus front, Germany announced 13,604 infections on Tuesday, compared to 11,169 infections registered on Monday. UK recorded 12,330 new cases yesterday, slightly higher than 12,155 reported day earlier. Spread of the pandemic is slowing in France which recorded 4,005 new cases, the lowest level since end of August and in Italy which reported 16,376 new infections, the smallest increase since October 22nd.

Meanwhile S&P 500 and the Nasdaq hit record highs  as hopes that a COVID-19 vaccine will be available soon. Investors’ attention focus on a handful of vaccine candidates as well as the start of global shipments as drugmakers submit paperwork for regulatory approvals. Dollar weakened after Fed Chair Powell pointed, during his testimony in Congress, that more fiscal action is needed and FED will expand both its bond-buying programme and ultra-cheap loans to banks. On the economic data, recent figures showed a rise in construction spending but a decrease in the manufacturing index. Yesterday US reported 157,901 new Covid-19 cases compared to 138,903 the day before. Death toll reached 1,172, compared to Sunday’s two week low of 826. Hospitalizations hit another record, with at least 96,039 people hospitalized for Covid-19.

US crude futures are trading 1.3% lower at $44.71 a barrel, while the international benchmark Brent contract fell 0.9% to $47.48. OPEC+ delayed output talks until tomorrow, as group members were unable to reach an agreement regarding  crude production cuts. Investors will also keep an eye on the API report which will be published later in the day, with forecasts of 2.272 million barrels drop .
Elsewhere, gold futures rose more than 2.0% to $1,813.00/oz, after dropping almost 6% in November, its worst month in four years, while silver surged more than 5% to $23.90. EUR/USD is trading 0.95% higher at 1.2048 amid weaker dollar.
AUDUSD – pair bounced of the upper limit of the consolidation range at 0.7340 which is additionally strengthened by 50 SMA (green line).  Should upbeat moods prevail, resistance at 0.7412 may come into play. Source: xStation5
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