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Intermarket:
• SP Futures 3669 (+0.44%)
• EUSTXX 3502 (+0.49%)
• Crude Oil 47.03 (+0.96%)
• US 10YR 0.89 (-0.33%)
• EurUsd 1.2142 (+0.27%)
• UsdJpy 104.00 (+0.04%)
• DAX 13165 (+0.41%)
Risk sentiment has improved as we approach the London open, as UK
PM Johnson and EU chief von der Leyen agreed to continue talks
potentially until Dec 31st. Markets are hoping this delay will offer
enough time to get a deal sorted. Today pay attention to EU Barnier’s
update at 9.30 CET. In other news, Pfizer vaccine begins its roll out in
the US this week after being approved at the weekend, and Moderna’s
vaccine should also be granted EUA this week.
US fiscal stimulus talks remain deadlocked over state and local aid, and
liability shields. Press reports noted lawmakers are beginning to look
at smaller and less contentious measures and could unveil a two-part
$908B package even today perhaps.
Looking ahead: the economic calendar for Europe is quiet today.
OPEC’s oil market report will be published, with crude heading higher
again. The US Electoral College is set to cast votes today after the
Supreme Court blocked Trumps’ attempt at overturning the election
results.
For this week’s themes and drivers, please see our Weekly Call
Matters that Matter:
• Electoral College voting day in the US expected to confirm
Biden victory.
• Westpac on the Australian dollar - on its way to 0.82 as RBA
to extend QE by 100 Bln into 2021.
• Canada’s PM Trudeau announces the first batch of
coronavirus vaccine has arrived
• UK Times expresses optimism on Brexit trade talks
• Trump, top officials, White House staffers to be offered
COVID-19 vaccine this week
• Brexit trade talks update by Barnier scheduled for 9.30 CET
• Germany, Italy mulling tougher restrictions into Christmas
Majors Weekly View:
USDJPY
• Prices have posted 3 consecutive little changed closes at the
weekly level. As such, trend signals are weak but on balance,
the outlook remains cautiously negative for this week.
• Risk sentiment supported during Asia on hopes a no-deal Brexit
can be averted.
• Opex today: 103.10-50 1.0 BLn, 104.00 550 Mln, 104.50
430Mln
EURUSD
• After posting a fresh 2 ½ year high at 1.2178, prices posted a little
changed close. With signals in overbought territory, pullbacks are
to be expected, but buying into dips remains the favoured strategy.
• Prices still supported on broad USD weakness.
• EUR/GBP in focus on Brexit negotiations.
AUDUSD
• With prices at overbought levels on multiple timeframes, Friday’s
shooting star formation suggests weakness in the short-term and
potential profit taking. However, the trend of weekly higher lows
remains intact and as such, buying into dips this week remains the
favoured play.
• Strong data releases continue, after Covid-19 restrictions eased,
supporting AUD.
• Westpac: RBA to extend QE by 100 Bln in June, see .8000 as potential
ceiling in Aud.
GBPUSD
• Losses of over 3 Big Figs last week interrupted the trend of higher
weekly lows and signals have switched to cautiously bearish this
week.
• Brexit talks extended – markets taking it as positive news.
• EU’s Barnier delivering an update at 9.30 CET.
FX Relative ATR Grid
Comment: Ranges expanded last week on AUD and GBP in particular.
That’s where the action should be most likely this coming week.