COVID-19 Vaccine Approvals and US Stimulus Restart?
Weekly Market Update 20 Nov 2020 – COVID-19 Vaccine Approvals and US Stimulus Restart?
1. Markets rallied on news that Senator Chuck Schumer and Senate Majority Leader Mitch McConnell agreed to restart coronavirus stimulus talk, in addition to optimism in expedited approvals for vaccine production. However, there may be temporary headwinds in the form of new state restrictions in a bid to control the virus from spreading further, as US reports new highs in COVID cases
2. Euro has shown great resilience in recent weeks despite the largest Eurozone countries being in lockdown mode and some countries still struggling to keep the virus under control. This suggests that the market may not have factored in the extent of the damage to the Eurozone economy due to the lockdowns
3. UK’s retail sales exceeded expectations with consumer spending rising instead of stagnating in October. Brexit negotiators have also managed to narrow their differences to three points, fair competition, fishing rights and the dispute resolution mechanism. The low likelihood of coming to a resolution for all three points presents an ongoing possibility of a hard Brexit which does not appear to be priced into the Sterling yet