Friday November 20th, 2020

Currency markets strengthen as vaccine filing news offsets the US political concerns. Pfizer announced its seeking FDA emergency authorization for its covid-vaccine and plans to file today with hopes to roll out the vaccine as soon as December. US election legal issues continue after a judge wont block Georgia vote certification giving Biden the win. Biden says the US Presidents delay on transition is “hard to Fathom”. The US President invites the Michigan lawmakers to the White House to seek to overturn the results. On Thursday relief news dominated headlines with Dem Schumer reported as saying that Rep McConnel had agreed to resume COVID-19 relief talks as coronavirus cases surge across the use. At the same time the US Treasury and the Fed clashed after Mnunchin said that key pandemic lending programs at the Fed would expire on Dec 31st, thus halting some Fed emergency funds. CNY and Asian currencies strengthened 0.2% on average. Trading currencies are mixed with JPY up 0.05%, while NOK is up 0.2%, ZAR, MXN, AUD are up 0.3% and NZD rallies 0.45% vs US$. Focus will remain on the US Treasury and Fed clash over emergency lending, no key US data out today and the G20 Summit at the weekend.

Oil prices hold steady up 1% as oil heads for their 3rd week of gains on vaccine hopes. The prospect of a Pfizer vaccine release by as early of December will likely provide additional confidence to the oil markets. C$ found support from US stimulus reports, vaccine news and stronger oil prices. Today focus will be on Canadian New house price index and more importantly Retail Sales which will be watched closely with expectations of 0.2%. Bias remains to sell US$ on any US$ rallies. Support holds at 1.3025 and resistance at 1.3170.

Euro steadies as worries over an EU budget veto ease and vaccine hopes continue. The Hungarian PM said the dispute over the EU’s recovery fund & Budget would eventually be resolved, easing potential veto concerns. The primary concern across the EU continues to be the surging coronavirus cases. Germany reported a record number of coronavirus cases today putting pressure on the government to implement stricter restrictions across the country. Vaccine news – Brexit updates – US Stimulus will be followed closely. Support holding at 1.1780 with resistance at 1.1880, if breached look for a test 1.2011(sep1st)

GBP remains above 1.3250 supported by positive UK retail sales data amid suspended Brexit talks. UK Retail sales jumped to 1.2% vs the flat expectations, which provided a positive boost to the pound. Brexit talks halted for in person negotiations after a member of the EU negotiator team tested positive causing the need for the team to self-isolate. Negotiations continue, but reports that the EU is preparing for a no-deal Brexit plans amid the negotiations slow progress. Support 1.3150 with resistance extends to 1.3325, if breached look for possible extension to 1.3482 (Sep1st).