Coronavirus pandemic re-emerged as a big source of risks in the market after European countries started to impose tougher restrictions. Developments in this area will be closely watched by the equity and oil traders in the coming days. Elsewhere, FX traders will tune in for RBNZ rate decisions and FOMC minutes releases. Be sure to watch DE30, NZDUSD and OIL next week!
DE30
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Create account Try a demo Download mobile app Download mobile appEquities in Europe took a hit at the end of the week after Austria decided to reimpose Covid-19 lockdown. This was another European country that decided on more strict measures aimed at curbing rising virus cases. Flash PMI readings for November scheduled for Tuesday will show whether the worsening pandemic situation started to dent moods within the economy. French reading at 8:15 am GMT and German reading at 8:30 am GMT will be most closely watched. Deterioration is expected in both services and manufacturing sectors.
NZDUSD
The Reserve Bank of New Zealand will announce the next monetary policy decision on Wednesday, 1:00 am GMT. Recent data from the country has been strong and rate hikes were well-communicated by the Bank. A 25 basis points rate hike looks like a done deal so the attention will be on the forward guidance. Investors will also be served FOMC minutes on Wednesday (7:00 pm GMT) but with QE already announced, release is unlikely to turn out to be a market mover. NZDUSD has been struggling on the back of USD strengthening recently. Will RBNZ help the pair recover?
OIL
Renewed virus fears and a risk of new lockdowns also impacted risk assets other than stocks. Oil is a perfect example with WTI and Brent dropping to the lowest level since the beginning of October. Lockdowns would have a disastrous impact on oil demand therefore reaction is reasonable. Having said that, potential lockdown announcements from other countries may overshadow any developments in strategic reserve release debate. It would also prove that OPEC+ was right by staying on hold amid expectations of year-end demand drop.
