Market Commentary – November 13, 2020

Kevin Jock

13th November 2020

    Heading into Friday, Pfizer’s vaccine hope could not withhold the increasing risk pertaining to COVIDs’ relentless second-wave. With corona back in headlines, Nasdaq remained stable whilst the S&P500 and Dow retreated from all-time highs. America’s coronavirus complacency see’s daily new infections constantly breaking new highs, with yesterday figure stood at 142,860 cases. Zero congressional coordination has starved States of much needed stimulus support, whilst lockdowns and curfews have been limited to piecemeal implementation. Thus far, New York signalled closing down schools again. And in Chicago, the mayor urged residence to stay indoors.

    However, there is no guarantee stricter lockdowns would alleviate the virus’s spread as Italy surpasses 1 million cases, France with 35,897 daily new cases (up from 22,180 on Tuesday) and Britain tops 33,470. Central banking heads also remarked yesterday a COVID-19 vaccine alone is not to enough propel nations out from economic troughs. Consequently, this slew of less optimistic news saw European shares retreat from monthly highs as the STOXX slid 1.8% after having gained 12.5% this month.

    Asia saw mixed results with Australia and Japan unchanged while Hong Kong gapped 1% lower. In between US – China, the special Administrative territory is feeling the brunt of rising disputes. Just yesterday President Trump signed an executive order prohibiting U.S investment into Chinese companies with connections to the military. Hopes that a Biden would improve relations was quashed by China’s former finance minister whom remarked “Even if Biden is elected, the U.S. suppression of China will be inevitable”.


Figure 1 (Source: IS Prime): USDTHB : Prospects of a revitalized tourism industry saw investors pile into the Thai Baht.

    Though the U.S. dollar index remained steady overall, a change in sentiment saw the greenback and yen retain their safe-haven status again. Among majors, the dollar appreciated whilst against the yen, the dollar lost 29 pips. In focus today, since the start of the month, the Thai Baht has appreciated 90 pips against the USD. Optimism towards the vaccine revitalizing Thailand’s tourism industry saw investors continue to pile into the Thai. Elsewhere, the Turkish lira appreciated another 1,280 pips to settle below the 7.7000 level. Gold oscillates 1,840 and 1,860 whilst Bitcoin breaks out another $300 to above 16,000.

Headliner to Review

  • Preliminary GDP of quarter 3 in UK increased 15.5%, compared with the previous decrease of 19.8%. The figure was a slightly worse than the expectation of 15.8% but it’s still expected. The rebound marks the sharpest quarterly expansion in UK since 1955. However, the GDP is still 9.7% below the figure at the end of 2019.
  • US unemployment claims decreased slightly from 757,000 to 709,000, which was better than the forecast 730,000. However, it remains at a very high level of unemployment claims.
  • The CPI figures in the US are worse than the expectations. The CPI and core CPI decreased from 0.2% increase to 0% change.
  • US Crude Oil Inventories increased by 4.3 million barrels from the previous week, compared with the previous figure of 8 million barrels decrease. At 488.7 million barrels, US crude oil inventories are around 6% above the five-year average.

Headliner to Watch

  • Europe expected to show flash GDP remain unchanged at 12.7% in Q3. However the figure excludes the economic damage from the recent lockdown of which most likely would reverberate in Q4 figures.
  • American consumer sentiment to edge higher from 81.8 to 82.1 but still remain below pre-pandemic levels despite a recovering economy.
  • Core PPI in the U.S. to stay positive for four consecutive months though a slow down is expected from 0.4% to 0.2%

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Antony Tan
Ben Li
Kevin Jock