Market Commentary – November 19, 2020

Kevin Jock

19th November 2020

    Pfizer one ups Moderna with final clinical-trial data revealing a 95% efficacy rate. Bringing into question whether an additional 0.5% outweighs the vaccine’s tougher storage conditions and shorter shelf life. Pfizer is expected to apply for U.S. and E.U emergency regulatory authorization within days. Despite recent vaccine breakthroughs, Wall Street retreated for a second-straight day, as resurging COVID-19 cases temper U.S. States to set tighter rules on daily American lives. In the meantime, unemployment benefits for more than 10 million workers is set to expire in December unless congress passes a renewed stimulus package.

    Across the Atlantic, European indices take a late-session tumble following an uptick from Pfizer’s announcement. Late-session saw investors remain cautious about short-term prospects for a vaccine, considering most health experts expect shots to be widely distributed only in the latter half of 2021. The FTSE fell 0.5% ahead of Thursday’s EU leaders’ video conference summit, seen as the final deadline for Brussels and Boris to strike a draft Brexit trade deal.

    Coming into Asia, both Australia and Hong Kong benchmarks gapped lower on open by 0.6% whilst Japan remained relatively unchanged. The S&P200 recovered the entirety of lost ground intra-day after consensus-beating Aussie employment data revealed a resilient labour market.


Figure 1 (Source: IS Prime): XAUUSD Daily Chart : Gold heads towards important 1,850 level where previously price action found strong support.

    Despite threats from the UAE considering leaving OPEC and COVID-19 dimming global demand recovery, crude oil edges higher as recent data see Chinese tank operators and refineries expanding storage facilities in anticipation for additional buying in 2021.

    Meanwhile the U.S. dollar remains in low demand among majors, though trimmed losses against exotic counterparts. Gold fall’s another $80 as it heads towards an important psychological level $1,850 of which price action saw the precious metals bounce off twice. Following a break above $18,000, Bitcoin takes a breather at $17,800. Since Paypal’s integration, the cryptocurrency has soared 57% within 30 days raising caution of an imminent bust reminiscent of 2017.

Headliner to Review

  • The employment figures in Australia are better than expectations. Employment Change jumped from -42.5k to 178.8k. The unemployment rate increased slightly from 6.9% to 7.0%.
  • The economic figures in Canada are better than expectations. CPI m/m increased from -0.1% to 0.4% while Core CPI m/m increased from 0.1% to 0.4%. Common CPI y/y rose from 1.5% to 1.6%. Median CPI y/y remained at 1.9%. Trimmed CPI y/y rose from 1.7% to 1.8%.
  • The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for October new residential building permits. Building Permits remained unchanged at 1.55 million. Housing starts increased from 1.46 million to 1.53 million.
  • Inflation in Europe continues to stay very low. Final CPI in Europe remained unchanged at -0.3% while Final Core CPI remained unchanged at 0.2%.
  • CPI in UK are higher than expected but it is well below target level. CPI y/y increased from 0.5% to 0.7%. Core CPI y/y increased from 1.3% to 1.5%.

Headliner to Watch

  • Canadian ADP non-farm employment change will be released today. Previous data showed 2 consecutive months of contraction in the labour market with Octobers’ data showing 240.8K lost their jobs and is expected to remain in negative territory coming into Christmas holiday.
  • Unemployment claims is expected to show a slight improvement from 709K to 707K. Nonetheless the overshadowing theme is American’s labour market recovery is currently in stand still.

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Antony Tan
Ben Li
Kevin Jock