Market Commentary – November 27, 2020

Kevin Jock

27th November 2020

    Mute volatility across Wall Street as American’s celebrated thanksgiving. Meanwhile, for the first time since the election, President Trump answered questions from reporters. Among the more interesting remarks, Trump has promised to leave the White House once Joe Biden is confirmed by the electoral college.

    Across the Atlantic, European indices grind lower amid renew doubts over the highly anticipated vaccines and the economic damage existing restrictions will have on future growth. Following widespread scrutiny over their COVID-19’s vaccine efficacy, AstraZeneca has been forced back into conducting additional global trials. Preliminary results were peculiar, revealing a lower dosage had a better efficacy rate at 90%, whilst a higher dosage reduced the figures down to 70%.

    The FTSE was the worst hit, sliding 0.67% after U.K. health minister Hancock announced swaths of England will not only remain in lockdown after December 2nd, but will also be placed under new, stricter tier 3 measures. In tier 3, households cannot physically mingle, hospitability and entertainment venues will be all be shut, and travel is discouraged. Boris Johnson defended the measures stating, “if we ease off now, we risk losing control…forcing us back to a new year national lockdown”.

    In Asia, worsening diplomatic ties between Beijing and Canberra saw the S&P200 edge lower as China slap tariffs on Australian wine. Meanwhile, surging industrial profits in China boosted Hong Kong and Japan higher intraday by ??? and ??? respectively.


Figure 1 (Source: IS Prime): Bitcoin Daily : Bitcoin tumbles after briefly breaching all time highs.

    Despite growing uncertainty, the U.S. dollar is poised for a down week as overall risk sentiment continues to improve. Elsewhere, despite a lack of fundamental news, bitcoin tumbles 10% on Thursday following a meteoric 80% rise since October. Crude oil fell below $45 over growing differences among OPEC states. Last meeting concluded to postpone production for the next 3 months however the UAE and Iraq are eager for a shorter duration.

Headliner to Review

  • In Europe, M3 Money Supply increased slightly from 10.4% to 10.5%, which was slightly better than the expectation 10.4%. Private Loans remained at 3.1%, which met the expectation.
  • Tokyo Core CPI dropped from -0/5% to -0.7%, which matched forecast. However, it is the biggest annual drop since May 2012. It is a sign that the hit to consumption from coronavirus pandemic was heightening recession on the economy. Economic figures show that consumer prices worldwide still stay weak.
  • New Zealand’s Consumer Confidence Index on November reversed its previous sharp rebound, falling from an eight-month high of 108.7 in October to 106.9, a monthly decline of 1.7%.

Headliner to Watch

  • France expected to release improving consumer expenditure with figures increasing from -5.1% to 3.6% whilst preliminary CPI data remains at 0. Q3 GDP is also expected to show a dramatic reversal to 18.2% following economic contractions during the worst of the pandemic in Q2.

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Antony Tan
Ben Li
Kevin Jock