Last week’s strong global equity moves were supported this week as more positive vaccine news helped boost risk assets higher. News that Moderna’s vaccine was 95% effective and easier to transport helped support the case for buyers in global stocks. The market is currently balancing long-term hopes of a return to normality next year vs a short-term dip in economic recovery over current rising COVID-19 cases. In other news, expectations of a Brexit deal supported the GBP and helped push the GBPUSD further towards August highs at 1.3500. Will a deal finally be reached next week or is this another false start for discussions?

Other key events from the past week

  • Vaccine news: Moderna’s vaccine news, November 16. A longer shelf life for its COVID-19 vaccine & only the need for refrigeration vs Pfizer’s need for -70C storage was good news for a global recovery in 2021. Some investors bought heavily into cyclical stocks on the growing hopes of a normal 2021.
  • USD: Retail sales disappoint, November 17. The US consumer makes up around 70% of the United States GDP so a weaker-than-expected retail sales reading this week helped send the dollar lower. Retail sales only rose +0.3% last month vs the Reuters expected poll of +0.5%.
  • Brexit: GBP gains on anticipation of a deal, November 17. UK Chief Brexit negotiator told UK PM Johnson to expect a Brussels trade agreement early next week. Will a deal finally be delivered? Register for our Wednesday workshop to find out how you can develop a trading plan for the week ahead.

Key events for the coming week

  • EUR: Key PMI data. November 23. The Eurozone starts a quiet economic data week with PMI data out of France and Germany. Expectations are that the ECB will add further stimulus packages and a miss in PMIs here will add to selling pressure to the euro heading into the ECB’s next rate meeting.
  • USD: FOMC minutes, November 25. In a light calendar week, the FOMC minutes will be viewed for clues as to the Federal Reserve’s next policy move. No surprises are expected and you can read the last FOMC statement here.
  • SP500: Strong period for US stocks, November 20 – Dec 06. The S&P 500 has gained value in eight out of the last ten years, from Nov 21 through to Dec 04. Is next week a great time for dips to be bought on vaccine optimism? Or, is 2020 a terrible year to consider seasonal trades?