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Transition funds released to Biden and Eurozone’s resiliency

Weekly Market Update 27 Nov 2020 – Transition funds released to Biden and Eurozone’s resiliency 

1. Risk of a political standoff receded as the transition funds were formally released to President-elect Biden, effectively suggesting that the incumbent has tacitly admitted that he has finally come to terms with the election results. According to Markit Economics’ PMI reports, manufacturing and service sector activity expanded faster for the month of November, a surprise given that COVID-19 cases shot up

2. The PMIs for the Eurozone were better than expected, with manufacturing holding up in Germany. This was a huge sigh of relief given the numerous lockdowns announced. Subsequent release of the IFO report reinforced the point where Germany’s industry was resilient to withstand the downturn. EURUSD continued to rally as a result

3. Sterling rallied with several pieces of positive data, including better than expected economic data, AstraZeneca vaccine news and reports that 95% of the Brexit deal was done, though experts were cautious as the remaining 5% was the knotty portion of adjudication for potential future trade conflicts. Regardless, the market shrugged it off and expected a deal to be reached anyway

Salzworth Asset Management