Unemployment remains the significant global issue. US weekly claims once again had a poor week, missing expectations significantly and registering 853,000 new claims. This followed the much weaker than expected Nonfarm Payroll headline last week of only 245,000 new jobs for November.

The Electoral College formally confirmed President-Elect Biden, and the leader of the Republicans in the Senate (Mitch McConnell) also acknowledged the result. President Trump still refuses to concede. The Georgia Senate run-off, January 5, and the Biden Inauguration, January 20, are the next key dates.

The Pfizer/BioNTech vaccine is being rolled out in both the US and UK, with expectations that the Moderna vaccine will receive FDA approval this week. News that has helped to lift sentiment as the pandemic and lockdowns continue to grow. There have now been more than 72.0m confirmed cases and over 1.60m people are known to have died.

The latest attempt at the next round of government stimulus for the US economy looks promising. The bipartisan group proposed a $908 billion package that could be passed in two parts, and Ms. Pelosi is even talking up a $1.4 trillion package. An agreement to avoid a US government shutdown was also confirmed ahead of key central bank meetings of the FED, BOE & BOJ.

The USDIndex traded to new 32-month lows this week. It plummeted to test 90.00 and remains anchored below 91.00. EURUSD rallied again to top at over 1.2200, USDJPY held narrow ranges but eventually moved below 104.00 to post 103.25 lows and Cable rallied to test 1.3500 again as Brexit trade talks ebbed & flowed but still without a deal.

Global stock markets dipped and then rallied again this week as the S&P500 breached 3700 again. The Biden confirmation, positive vaccine news and expectations of more fiscal stimulus from the US continue to lift sentiment.

UK-EU trade negotiations continue to grind on; however, there is still no breakthrough. The Sunday deadline came and went with both parties talking down the chances of a deal. However, a limited free trade agreement is still expected given the explosive economic impact a no-deal exit would have. But still, even at this incredibly late stage, rule nothing out.

The Gold price recovered this week to break back over the key $1850 level from lows at the $1820 support area. Bitcoin spiked lower this week to below $18,000 before recovering to $19,000 and for the first time breach $20,000, consolidation mode at highs. Volatility continues to follow the crypto market space.

USOil prices are now into their third week over the key $45.00 level, currently peaking at $47.88 ahead of this week’s inventories. The improving global sentiment underpins sentiment and perceived demand.

The yield on the US 10-Year Treasury Note cooled this week but remains north of 0.9000, to trade around 0.9250. The anticipation of a US stimulus package, a government funding agreement, record high stock markets and the weaker US Dollar keep yields bid and Treasury demand weaker.

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Stuart Cowell

Head Market Analyst

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