For instant updates, follow FCI Markets on Twitter
Intermarket:
- SP Futures 3571 (+0.18%)
- EUSTXX 3452 (-0.81%)
- Crude Oil 41.53 (-0.72%)
- US 10YR 0.86 (-2.65%)
- EurUsd 1.1849 (-0.03%)
- UsdJpy 103.87 (+0.07%)
- DAX 13091 (-0.78%)
Risk appetite retreated again overnight amid rising Covid cases in the US and Europe which weighed on investor confidence. Poland is considering a national lockdown now, and Scotland is in total lockdown. In the US, NYC schools are now closed as state-wide testing rates hit 3% and US deaths exceeded 250.000. The governor of Minnesota, Walz, has ordered restaurants and bars to stop in-person dining; also, all entertainment and fitness centres will close for 4 weeks.
Covid-19 cases, vaccine news, US political uncertainty remain the focal points. In Europe, Brexit is also closely watched. Today EU leaders meet in order to discuss Covid-19 but also the EU budget and recovery fund approval.
There was also a story in Bloomberg that Canada and the UK are near a post-Brexit trade agreement which would avert tariffs but again, markets paid no attention.
Looking ahead: ECB’s Lagarde, Villeroy, Hernandez de Cos and Schnabel, as well as Fed’s Mester, are speaking.
Matters that Matter:
• Pfizer-BioNTech vaccine deliveries could start before Christmas
• Georgia, Wisconsin recounts likely will not change Trump election defeat, officials say
• New York City schools halt in-person classes
• Trump has made no plans to host G7 summit – diplomatic sources
• EU leaders set to demand no-deal Brexit plans be published - Times
• Tokyo raises coronavirus alert for infections to highest level
• China to cut tariffs, boost imports of high-quality goods and services - Xi says
• AU Oct Employment 178.8k, -30.0k f’cast
Majors 1-Day View:
USDJPY
- Prices posted the 5th lower daily high in a sequence on Wednesday, with losses of over ½ Big Fig. As such, the outlook remains bearish for today but with increasing caution as we approach the support area at the November lows.
- JPY sought on weak US data, Covid-19 spread and political uncertainty.
- Offers from 104.00, bids defending possible KO option at 103.00
EURUSD
• 2 failed rallies on Tuesday and Wednesday, with little changed closes, left trend signals weak. Further selling in Asia trade interrupted the sequence of higher daily lows and as such, signals switch to a cautious bearish stance today.
• Offers reported around 1.1900
• USD sought as risk more off than on today.
• Covid-19 cases finally slowing in Europe.
AUDUSD
• After interrupting the small sequence of higher daily lows on Tuesday, prices posted a failed rally on Wednesday with sellers returning ahead of November highs. As such, signals remain slightly bearish into Thursday.
• AUD untouched by stellar jobs data.
• USD strength & risk sentiment weighing on AUD.
GBPUSD
• Prices tested the November highs on Wednesday, but sellers returned to the market, the day closing little changed. With further selling in Asia, prices interrupted the sequence of higher daily lows and signals are switching to temporarily bearish.
• GBP slightly weaker as EU leaders demand no-deal plans to be published.
• Prices still headline driven.
FX Relative ATR Grid
Comment: Ranges continue to decline, with contractions becoming evident on EUR crosses. Volatility is dissipating and being selective remains key.
FX Relative Strength Grid
Comment: the main signals into Thursday appear to be EUR weakness and NZD strength.