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News Recap: Use of the Pfizer/BioNTech vaccine lifted markets

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Going into final full week of trading, markets are somewhat positive after Asian bourses began the day upbeat. Both the ASX 200 and Nikkei 225 finished the session with gains albeit less than 1%. The DXY remains subdued beneath the 91.00 handle after gains within other G10 currencies weighed on the greenback. The EUA by the FDA for the use of the Pfizer/BioNTech vaccine also lifted markets as US equity futures digested the news. Despite this, Covid-19 readings in the nation continue to rise with cases topping 15.9mln and total deaths closing in on 300,000. Across the pond Germany is planning to shut most shops from this Wednesday until the 10th of January in an effort to contain the spread of the virus. This comes after German Chancellor Merkel outlined that the current lockdown restrictions have failed to reduce infections rates by a reasonable amount.

UK Focus

Sterling jumped to kick start the week as EU Commission President Von der Leyen and PM Johnson agreed to continue talks past the deadline owing it to a responsibility to ‘go the extra mile’. Cable was the worst performer last week as the asset dipped around 1.5% against the greenback on increasing fears that a no-deal Brexit was the most likely outcome as discussions remained gridlocked on major sticking points. Going into the week ahead, deliberations are set to continues with EU Chief negotiator Barnier set to brief both sides of the current state of play this morning. Market participants are still likely to approach the currency with caution after UK Cabinet ministers are set to draw up a multibillion-pound bailout package to offer support to industries set to be largely impacted by a no-deal Brexit.

WTI Crude

WTI crude and Brent continued to extend gains for a sixth consecutive week after both commodities finished the week up with modest gains over 1%. The assets have continued to benefit from the improved and constructive risk tone that has largely been as a result of the vaccine developments boosting sentiment. Going into the week ahead, JMMC meetings will be holding on Wednesday where market participants will aim to look for guidance from OPEC. This comes after the group decided to increase production by 500K bpd beginning from January 2021 with a monthly review set to take place thereafter.

Cryptocurrency

Cryptoassets are somewhat lower going into the week as most markets traded within consolidation. At the time of writing BTCUSD has reclaimed ground above the $19,000 handle though reached lows of $17,560 last week as market participants attempt to look toward the $20,000 mark. XRPUSD closed lower after losing over 17% in the prior week, price currently sits around 0.506 after breaking below its daily 21 EMA.

Here is a breakdown of the high impact data releases this week.

Wednesday

All Day OPEC JMMC Meetings. Markets to watch: ALL

08:15 French Flash Services PMI. Markets to watch: EUR Crosses

08:30 German Flash Manufacturing & Services PMI. Markets to watch: EUR Crosses

13:30 Core Retail Sales m/m. Markets to watch: USD Crosses

14:45 Flash Manufacturing PMI. Markets to watch: USD Crosses

19:00 FOMC Economic Projections & FOMC Statement. Markets to watch: USD Crosses

19:30 FOMC Press Conference. Markets to watch: USD Crosses

21:45 GDP q/q. Markets to watch: NZD Crosses

Thursday

00:30 Employment Change and Unemployment Rate. Markets to watch: AUD Crosses

08:30 SNB Monetary Policy Assessment. Markets to watch: CHF Crosses

09:00 SNB Press Conference. Markets to watch: CHF Crosses

12:00 MPC Official Bank Rate Votes, Monetary Policy Summary & OBR. Markets to watch: GBP Crosses

Friday

Monetary Policy Statement. Markets to watch: JPY Crosses

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