Experience of ecstasy – to calm financial markets this week, Pfizer vaccine “salvation” hope in the world caused a wild, gold once collapse exceeds $100, 10% crude violence, U.S. stocks intraday record is brushed again, but realistic problems emerge, such as transportation, production enthusiasm began to fade, at the same time, the deteriorating conditions in Europe and the United States the outbreak hit sentiment, too.
The Trump campaign has filed lawsuits in several states to challenge the results of the US election as the votes are still being counted. Meanwhile, Mr Biden is gearing up to take up the REINS of government, as world leaders this week congratulated him on his election.
Currency markets: The dollar surged closer to 93 on Monday on news of Pfizer’s vaccine, then climbed further in the next two days, hitting a weekly high around 93.20 on Wednesday before falling slightly on Thursday and Friday to close at around 92.75, up 0.5% for the week.
The dollar’s rebound came as the euro suffered heavy losses in the first half of the week, dropping more than 100 points to below 1.18 on Monday, then renewing its weekly low to 1.1745 on Wednesday before recovering slightly before the weekend to end the week at 1.1832, down 0.39% for the week. Sterling has had a good week, resisting the dollar’s strength on Monday and briefly touching above 1.33 on Wednesday before retreating to around 1.32 on the brexit news. After a week of violent dollar/yen trading, the yen was heavily sold on Monday, surging more than 200 points to 105.67 before retreating from its peak to end the week at 104.64, still up more than 1.3 percent for the week.
The Australian dollar has also been volatile this week. The Aussie fell back after hitting a high of 0.7339 early in the week before consolidating to end the week at 0.7272, essentially flat for the week. The New Zealand dollar started the week on a positive note, hitting its highest level since March 2019 at 0.6914 on Thursday, before easing slightly to close at 0.6847, up 1.2% for the week.
Commodities, spot gold this week crash scene experience, positive news, the vaccine on Monday fell to exceed $100, in a single day since high wild drain $1965 to $1850, after the remaining few days trying to rebound, but always failed to break through the 1900 barrier, finally closed at $1889, weekly decline reached 3.15%, worst week for seven weeks. Silver, which fell 6% on Monday and briefly lost the $24 mark, finished the week at around 24.65, down 3.74% for the week.
Crude oil prices rose sharply this week. Brent crude, which had plunged as low as $45.30 since the start of the week, retreated from its peak to close at around 42.63, up more than 7 percent for the week. Meanwhile, WTI crude surged above $43 at the start of the week before slipping back to close at $40.12, still up more than 7% for the week.
In global stocks, Vaccine hoped to push U.S. stocks to intraday record highs on Monday, but then risk sentiment cooled and it gave up some of its gains, while technology stocks underperformed this week. For the week, the Dow is up 4.1%, the S&P 500 is up 2.2%, and the Nasdaq is down 0.6%.
While the vaccine trials are ongoing and still pending approval, Pfizer and BioNTech said they have found no serious safety issues so far and expect to apply for U.S. emergency use authorization later this month.
The good news swept markets around the world. U.S. stocks surged to a record high, oil prices plunged 10 percent and gold prices plunged more than $100. Us dollar, Australian dollar and other currencies continued to rise, Japanese yen, Swiss franc, U.S. treasuries and other safe haven assets under pressure down…
“Election uncertainty is disappearing into the rearview mirror,” said Michael Antonelli, market strategist at Baird. Now, after the vaccine news, investor enthusiasm has been boosted.”
Ed Moya, senior market analyst at fx broker OANDA, said the vaccine news was “a huge boost to risk appetite”.
Moya said: “There has been a lot of nervousness among investors about the results of these trials, with the first vaccine trials showing a staggering 90 per cent efficacy, well above the average market expectation. We are seeing a massive reflation trade.”
Gold plunged from its high to more than $100 at one point. Edward Moya, senior market analyst at OANDA, said: “[The news] really exceeded everyone’s best-case scenario forecast. There was growing concern that we might not have a strong vaccine, so that triggered a risk off trade and for gold it marked a massive retreat from risk investments.”
Oil prices surged about 8 percent on Monday, their biggest one-day gain in more than five months. “The oil market reacted particularly strongly to the news because it was significant,” said John Kilduff, partner at Again Capital in New York. The epidemic has had a huge impact on transportation, with 80 percent of crude oil used as transportation fuel, so I think this is a reasonable response.”
But after a bout of euphoria, the market began to think more realistically and cooled its enthusiasm for vaccines. According to media reports, vaccines must be stored centrally at minus 70 degrees Celsius and transported at such temperatures, leaving many poor countries in Asia and elsewhere temporarily unable to use them because they lack the necessary refrigeration equipment.
“The dollar rally has paused because when you look at the details, there are still a lot of hurdles to overcome before the vaccine hits the market,” said JunichiIshikawa, senior currency strategist at IG Securities in Tokyo.
On the epidemic front, the economic outlook for the fourth quarter is worsening by the day as the number of coronavirus cases in the United States continues to rise. European officials also warned on Thursday against complacency about coVID-19, saying that while there was hope of a new vaccine to contain the outbreak, the surge in infections as winter approaches and efforts to contain it must continue.
Federal Reserve Chairman Colin Powell said Thursday that the novel Coronavirus vaccine, which is an effective novel coronavirus vaccine, is becoming more likely, which is good news for the economy in the coming months, but short-term risks remain as coVID-19 continues to spread. Mr. Powell reiterated his view for months that the Fed and Congress are likely to need to do more, with further fiscal stimulus.
Michael Frazis, portfolio manager at Frazis Capital Partners in Sydney, said: “I think it’s the dark before the dawn: a second coVID-19 outbreak, a new lockdown, a clear global problem, a renewed drop in travel… But at the same time, there is strong evidence that vaccine development is possible and that many people will be vaccinated within the next few months. We think these are all very positive factors, and in fact now is a good time to invest in the market.”
However, short-term traders still face a lot of risk due to uncertainty over issues such as U.S. stimulus measures, Frazis said.