The Week Ahead – U.S Politics, Monetary Policy, Economic Data, and COVID-19 in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 73 stats in focus in the week ending 22nd January. In the week prior, 46 stats had been in focus.

For the Dollar:

It’s a quiet week ahead on the economic data front.

In a shortened week, there are no material stats to consider in the 1st half of the week.

Through Thursday, Philly FED Manufacturing PMI and weekly jobless claims figures are in focus.

With market attention to labor market conditions, expect the jobless claims to have the biggest impact. Another jump in jobless claims would likely weigh on riskier assets.

At the end of the week, prelim private sector PMI figures for January wrap things up.

Housing sector data also due out in the week will likely have a muted impact on the Dollar and risk sentiment.

The Dollar Spot Index ended the week up by 0.75% to 90.772.

For the EUR:

It’s a busy week ahead on the economic data front.

On Tuesday, January ZEW Economic Sentiment figures for Germany and the Eurozone kick things off.

Germany’s ZEW Economic Sentiment indicator will likely be the key driver.

The focus will then shift to January prelim private sector PMI numbers on Friday. France, Germany, and the Eurozone’s private sectors will be in the spotlight on.

Expect Germany’s manufacturing and the Eurozone’s composite to be the key drivers.

Finalized December inflation figures for member states and the Eurozone, also due out in the week, will likely have a muted impact on the EUR.

On the monetary policy front, the ECB is in action on Thursday. No moves are expected, leaving the press conference as the key driver. Questions on the economic outlook are likely as EU member states extend lockdown periods.

The EUR ended the week down by 1.11% to $1.2082.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. Key stats include December inflation and retail sales figures, CBI industrial trend orders, and prelim January private sector PMIs.

Expect the retail sales figures and services PMI, due out on Friday, to have the greatest influence.

Away from the economic calendar, COVID-19 news will also influence. Following the vaccine approvals, the markets will be looking for new COVID-19 cases to begin abating.

On the monetary policy front, BoE Governor is scheduled to speak on Wednesday.

The Pound ended the week up by 0.16% to $1.3590.

For the Loonie:

It’s a busy week ahead on the economic calendar.

Key stats include December inflation and November retail sales figures due out on Wednesday and Friday.

Other stats include housing stats, manufacturing and wholesale sales figures. We would expect these stats to have a muted impact on the Loonie, however.

On the monetary policy front, the BoC is in action on Wednesday. With the markets expecting the BoC to hold rates steady, the rate statement and press conference will be the key drivers.

From elsewhere, economic data from China and private sector PMIs from the Eurozone and the U.S will also influence.

Expect COVID-19 news updates and chatter from Capitol Hill to also provide direction.

The Loonie ended the week down by 0.24% to C$1.2732 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a busier week on the economic data front.

Consumer sentiment figures for January are due out on Wednesday.

With consumer confidence key to fueling a pickup in consumer spending and an economic recovery, expect Aussie Dollar sensitivity to the numbers.

On Thursday, December employment figures will also provide direction ahead of retail sales figures on Friday.

Economic data from China and private sector PMI numbers from the U.S and the Eurozone will also influence.

COVID-19 news updates will remain a key driver in the week. however.

The Aussie Dollar ended the week down by 0.70% to $0.7703.

For the Kiwi Dollar:

It’s a quiet week ahead on the economic calendar.

In the 1st half of the week, 4th quarter business confidence and electronic card retail sales figures are in focus on Tuesday.

At the end of the week, Business PMI and 4th quarter inflation figures wrap things up.

Expect business confidence, retail sales, and 4th quarter inflation figures to be the key drivers.

The Kiwi Dollar ended the week down by 1.51% to $0.7133.

For the Japanese Yen:

It is a busy week ahead.

Finalized November industrial production figures get things going on Monday.

On Thursday, December trade figures will draw plenty of attention. With the COVID-19 pandemic continuing to wreak havoc, weak numbers could test market risk appetite.

At the end of the week, December inflation figures and prelim private sector PMIs for January wrap things up. The PMI numbers should have greater influence at the end of the week.

On the monetary policy front, the BoJ is in action on Thursday.

The Japanese Yen ended the week up by 0.09% to ¥103.85 against the U.S Dollar.

Out of China

It’s also a busy week ahead.

December industrial production and 4th quarter GDP numbers are due out on Monday. These will be the key stats of the week.

Other stats include fixed asset investment, retail sales, and unemployment figures. Barring dire numbers, however, these stats should have limited impact on market risk sentiment.

On Wednesday, the PBoC is also in action. However, the markets are not expecting any moves.

The Chinese Yuan ended the week down by 0.10% to CNY6.4809 against the U.S Dollar.

Geo-Politics

U.S Politics

It’s a busy week on Capitol Hill.

Inauguration Day and Trump’s impeachment will draw interest.

COVID-19

Vaccination rates and availability of vaccines will be key areas of interest.

An upward trend in vaccination rates and a downward trend on infection rates would support optimism towards an economic recovery.

Corporate Earnings

A number of big names deliver results in the week ahead.

From the U.S

These include:

Bank of America (Tues)

Goldman Sachs Group (Tues),

Netflix (Tues)

United Airlines (Wed)

Morgan Stanley (Wed)

Intel Corp. (Thurs).

The Weekly Wrap – COVID-19, Economic Data, and U.S Stimulus Weigh on Riskier Assets

The Stats

It was a relatively busy week on the economic calendar, in the week ending 15th January.

A total of 46 stats were monitored, following 61 stats from the week prior.

Of the 46 stats, 21 came in ahead forecasts, with 17 economic indicators coming up short of forecasts. There were 8 stats that were in line with forecasts in the week.

Looking at the numbers, 17 of the stats reflected an upward trend from previous figures. Of the remaining 29 stats, 23 reflected a deterioration from previous.

For the Greenback, it was a 2nd consecutive weekly gain, with the Dollar Spot Index rising by 0.75% to $90.772. In the previous week, the Dollar had risen 0.18% to 90.098.

Out of the U.S

It was a relatively busy week on the economic data front.

It was a quiet 1st half of the week, however, with stats limited to JOLTs job openings and inflation figures.

While job openings fell in November, inflation held steady, with the annual rate of core inflation holding at 1.6%.

Consumer prices rose by 0.4%, month-on-month, while core consumer prices increased by a modest 0.1%.

In a busy 2nd half of the week, key stats included the weekly jobless claims, retail sales, and consumer sentiment figures.

Jobless claims figure disappointed on Thursday, with initial jobless claims jumping from 784k to 965k.

In December, core retail sales slid by 1.4%, with retail sales falling by 0.7%, both following on from declines in November.

Consumer sentiment figures also disappointed.

According to prelim figures, the Michigan Consumer Sentiment Index fell from 80.7 to 79.2.

The downside was limited, however, supported by COVID-19 vaccines and hopes of a bipartisan shift.

The survey noted that the fall was minor when considering the sharp rise in COVID-19 related deaths, insurrection, and Trump’s impeachment.

Other stats included industrial production, NY Empire State Manufacturing, and business inventory figures. These stats had limited impact on the markets, however.

On the monetary policy front, FED Chair Powell assured the markets that rates were not going up any time soon. The FED Chair also stated that there would be no tapering of bond purchases near-term.

In the equity markets, the NASDAQ and the S&P500 slid by 1.54% and by 1.48% respectively. The Dow fell by a more modest 0.91%.

Out of the UK

It was a relatively busy week on the economic data front.

Monday through Thursday economic data was limited to BRC retail sales and RICS house price figures.

Retail sales rose by a further 4.8% in December, following a 7.7% rise in November according to the BRC.

House prices were also on an upward trend, with the RICS house price balance coming in at 65%. While down marginally from October’s 66%, upward pressure on house prices is expected to remain.

At the end of the week, industrial and manufacturing production and GDP figures were in focus.

In November, industrial production fell by 0.1%, following a 1.1% rise in October. Manufacturing production rose by 0.7%, following a 1.6% increase in October. Both fell short of forecasts.

GDP figures were not much better. In November, the economy contracted by 2.6% reversing 0.4% growth from October. On a 3-month rolling basis, the economy grew by 4.1%, slowing from a 10.2% to October.

Trade data released on Friday had a muted impact on the Pound, however. In November, the trade deficit widened from £13.29bn to £16.01bn, with the non-EU deficit widening from £5.82bn to £8.01bn.

Away from the economic calendar, a pickup in vaccination rates in the UK offset the negative sentiment towards lockdown measures.

In the week, the Pound rose by 0.16% to $1.3590. In the week prior, the Pound had fallen by 0.76% to $1.3568. A 0.72% slide on Friday pared some of the gains from earlier in the week.

The FTSE100 ended the week down by 2.00%, partially reversing a 6.39% gain from the previous week.

Out of the Eurozone

It was a relatively quiet week on the economic data front.

Industrial production and trade figures for the Eurozone, together with full year GDP numbers for Germany were in focus.

It was a mixed set of numbers for the EUR and the European majors.

For the Eurozone, industrial production jumped by 2.5% in November, following a 2.3% increase in October.

Trade data disappointed, however, with the trade surplus narrowing from €30.0bn to €25.8bn in November. Weak numbers were expected, however, following Germany’s trade data from last week.

While economic data from Germany has been impressive of late, GDP figures disappointed.

For the full year 2020, the economy contracted by 5.0%, following 0.6% growth in 2019. Economists had forecasted a 5.1% fall, however, which limited the damage.

ECB President Lagarde had spoken the day before the release of the GDP numbers. Lagarde continued to stand by the ECB’s economic forecasts, in spite of the extended lockdown measures in the EU. Lagarde pointed out that the forecasts had factored in lockdowns through the 1st quarter.

At the end of the week, finalized inflation figures for France and Spain had a muted impact on the EUR.

On the monetary policy front, the ECB’s monetary policy meeting minutes also failed to move the dial in the week.

For the week, the EUR slid by 1.11% to $1.2082. In the week prior, the EUR had risen by 0.02% to $1.2218.

For the European major indexes, it was a bearish week. The EuroStoxx600 fell by 0.81%, with the CAC40 and DAX30 sliding by 1.67% and 1.86% respectively.

A continued spike in new COVID-19 cases weighed. Across the EU, member states were reporting particularly low vaccination rates that added to the negative mood.

For the Loonie

It was a particularly quiet week on the economic data front. There were no material stats to provide the Loonie with direction.

At the start of the week, the BoC’s Business Outlook Survey failed to move the dial.

Market optimism, fueled by expectations of a sizeable U.S stimulus package, had supported crude oil prices and the Loonie.

A Friday sell-off, however, left the Loonie in the red. Concerns over the COVID-19 pandemic and market reaction to the Biden stimulus package weighed on riskier assets.

In the week ending 15th January, the Loonie fell by 0.24% to C$1.2732. In the week prior, the Loonie had risen by 0.2% to C$1.2702.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar, following solid gains from the previous week.

In the week ending 15th January the Aussie Dollar fell by 0.70% to $0.7703, with the Kiwi Dollar ended the week down by 1.51% to $0.7133.

For the Aussie Dollar

It was a quiet week on the economic calendar.

November retail sales, building permit, and new home loan figures were in focus in the week.

Retail sales impressed in November, supported by an easing of containment measures in Victoria. Sales jumped by 7.1%, following a 1.4% rise in October.

Building permits rose by 2.6%, following a 3.3% increase in October, with new home loans surging by 5.5%.

Home loans hit a record high mid-way through the 4th quarter.

From elsewhere, trade data from China also provided support, with imports and exports on the rise in December.

For the Kiwi Dollar

It was also a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

For the Japanese Yen

It was a relatively quiet week on the economic calendar. Core machinery orders were in focus in the week.

Month-on-month, orders rose by 1.5% in November, following October’s 17.1% surge. Economists had forecast a 6.2% slide. Year-on-year, orders were down by 11.3%, after having risen by 2.8% in October. Economists had forecast a more severe 15.4% slump.

The stats ultimately had a muted impact on the Japanese Yen, however. COVID-19 news and chatter from Capitol Hill remained key drivers in the week.

The Japanese Yen rose by 0.09% to ¥103.85 against the U.S Dollar. In the week prior, the Yen had fallen by 0.72% to ¥103.94.

Out of China

Inflation and trade data for December were in focus.

The stats were skewed to the positive, supporting riskier assets in the week.

Inflationary pressures returned at the end of the year, with consumer prices rising by 0.7%, month-on-month. In November, consumer prices had fallen by 0.6%. As a result, consumer prices were up by 0.2% year-on-year, partially reversing a 0.5% decline from November.

Wholesale deflationary pressures also eased at the end of the year.

Trade data was more impressive, however, with exports surging by 19.1% following a 21.1% jump in November. Imports increased by 6.5%, leading to a widening in the USD trade surplus from $75.4bn to $78.16bn.

While the stats were positive, a spike in new COVID-19 cases in China was a concern in the week.

In the week ending 15th January, the Chinese Yuan fell by 0.10% to CNY6.4809. In the week prior, the Yuan had risen by 0.81% to CNY6.4746.

The CSI300 slipped by 0.68%, while the Hang Seng ended the week up by 2.50%.

The Week Ahead – Economic Data, COVID-19, and Capitol Hill in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 42 stats in focus in the week ending 15th January. In the week prior, 61 stats had been in focus.

For the Dollar:

It’s a quieter week ahead on the economic data front.

In the 1st half of the week, JOLTs job openings and inflation figures are due out.

The numbers are unlikely to have a material impact on the Dollar and market risk sentiment, however.

Expectations are for labor market conditions and consumption to improve as the U.S government administers vaccinations.

In the 2nd half of the week, it gets a little busier.

The weekly jobless claims figures will draw attention on Thursday.

At the end of the week, consumer sentiment and industrial production will also provide direction.

On the monetary policy front, FED Chair Powell could move the dial on Thursday.

Away from the economic calendar, expect chatter from Capitol Hill and COVID-19 news to also influence.

The Dollar Spot Index ended the week up by 0.18% to 90.098.

For the EUR:

It’s a quiet week ahead on the economic data front.

Industrial production and trade data for the Eurozone are due out on Wednesday and Friday.

We would expect the industrial production figures to garner the greatest interest.

Finalized December inflation figures for Spain and France are also due out. These are likely to have a muted impact on the EUR, however.

On the monetary policy front ECB President Lagarde has 2 scheduled speeches in the 1st half of the week. Expect any forward guidance to influence. On Thursday, the ECB’s monetary policy meeting minutes are also due out but should have a muted impact.

The EUR ended the week up by 0.02% to $1.2218.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. Key stats include November industrial and manufacturing production, and GDP figures for November.

December retail sales and November trade figures are also due out but would likely have a muted impact on the Pound.

Away from the economic calendar, expect COVID-19 news to also influence. With the UK in lockdown, strong progress towards the vaccination of priority groups should ease pressure on the Pound.

The Pound ended the week down by 0.76% to $1.3568.

For the Loonie:

It’s a particularly quiet week ahead.

There are no material stats to provide direction in the week.

The lack of stats will leave the Loonie in the hands of crude oil inventory numbers and COVID-19 news updates.

OPEC’s monthly report will also provide direction.

The Loonie ended the week up by 0.20% to C$1.2702 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week on the economic data front.

November retail sales figures are due out on Monday along with consumer sentiment numbers on Tuesday

With no other stats to consider, expect plenty of interest in the numbers. For the RBA, consumer consumption remains key to any economic recovery.

Away from the economic calendar, COVID-19 news will remain a key driver in the week.

The Aussie Dollar ended the week up by 0.82% to $0.7757.

For the Kiwi Dollar:

It’s a relatively quiet week ahead on the economic calendar.

Key stats include building consent figures and electronic card retail sales figures.

Expect electronic card retail sales figures to have the greatest impact in the week.

Away from the calendar, COVID-19 will continue to provide direction. Any supply hiccups issues would test support for the Kiwi Dollar.

The Kiwi Dollar ended the week up by 0.75% to $0.7242.

For the Japanese Yen:

It is a particularly quiet week ahead.

Economic data is limited to November current account figures that are likely to have a muted impact on the Yen.

The focus will remain on COVID-19 updates and sentiment towards the economic outlook. A spike in new COVID-19 cases in Japan will be of concern, with the economy continuing to struggle.

The Japanese Yen ended the week down by 0.72% to ¥103.94 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead.

December inflation and trade figures are due out on Monday and Thursday.

While inflation figures will influence, expect trade data to have the greatest impact.

The Chinese Yuan ended the week up by 0.81% to CNY6.4746 against the U.S Dollar.

Geo-Politics

U.S Politics

U.S politics will likely remain the key drive in the week ahead.

Following the scenes on Capitol Hill, the Democrats are looking to oust Trump from office.

Trump is unlikely to go quietly, however. His actions have split the Republican Party. He has also united the Democrats, who now have control of both Houses.

With Inauguration Day approaching, the markets will be looking for Biden’s early goals.

News of plans to deliver further stimulus details this week should support riskier assets further.

The Weekly Wrap – U.S Politics, Stats, and COVID-19 Vaccine News were Key Drivers

The Stats

It was a particularly busy week on the economic calendar, in the week ending 8th January.

A total of 61 stats were monitored, following 15 stats from the week prior.

Of the 61 stats, 23 came in ahead forecasts, with 33 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 20 of the stats reflected an upward trend from previous figures. Of the remaining 41 stats, 34 reflected a deterioration from previous.

For the Greenback, it was a mixed week. After falling to a week low 89.209, the U.S Dollar Spot Index rebounded to end the week up by 0.18% to 90.098. The weekly gain marked a 3rd gain in 8-weeks. In the week prior, the Dollar Spot Index had fallen by 0.32% to end the week at 89.937.

In the week, the Democrats won the Senate race, delivering expectations of substantial fiscal support. Optimism towards the economic outlook was also fueled by COVID-19 vaccine news.

Out of the U.S

It was a relatively busy week on the economic data front.

Private sector PMI and labor market numbers were the key drivers in the week.

In December, the ISM Manufacturing PMI rose from 57.6 to 60.7, with the Services PMI climbing from 55.9 to 57.2.

A 123k fall in nonfarm payrolls in December, according to the ADP failed to spook the markets ahead of the official government figures.

In the week ending 1st January, initial jobless claims slipped from 790k to 787k.

At the end of the week, nonfarm payrolls fell by 140K in December, partially reversing a 336k increase in November.

In spite of the fall, the unemployment rate held steady at 6.7%, with the participation rate holding steady at 61.5%.

In the equity markets, the S&P500 and Dow rose by 1.61% and by 1.83% respectively. The NASDAQ led the way, however, rallying by 2.43%.

Out of the UK

It was a relatively quiet week on the economic data front.

Finalized manufacturing and service sector PMI and Construction PMI figures for December were in focus.

The stats were skewed to the negative, with services PMI, composite PMI, and construction PMI coming up short of expectations.

An upward revision to December’s manufacturing PMI was brushed aside, with service sector activity key.

At the end of the week, December house price figures numbers had a muted impact.

With stats skewed to the negative, a reintroduction of lockdown measures added further pressure on the Pound in the week.

Ongoing vaccinations, following the approval of the AstraZeneca vaccine limited the downside, however.

In the week, the Pound fell by 0.76% to $1.3568. In the week prior, the Pound had risen by 0.85% to $1.3672.

The FTSE100 ended the week up by 6.39%, reversing a 0.64% loss from the previous week.

Out of the Eurozone

It was a particularly busy week on the economic data front.

Private sector PMI figures for Italy and Spain and finalized figures for France, Germany, and Italy were in focus.

From Germany, retail sales, unemployment, factory orders, industrial production, and trade figures also influenced.

French consumer spending numbers also drew interest at the end of the week.

Eurozone unemployment, retail sales, trade data, and inflation figures had a muted impact on the EUR and European majors, however.

It was a mixed bag on the economic data front.

Manufacturing sector activity picked up in December, supported by another sharp increase in new orders.

Service sector conditions improved, though not enough for the sector to return to expansion.

Economic data from Germany was also impressive.

Retail sales saw an unexpected rise in November, with unemployment seeing a surprise fall to leave the unemployment rate at 6.1%.

Factory orders and industrial production also saw further upside in November, while trade data disappointed. In November, Germany’s trade surplus narrowed from €18.2bn to €16.4bn.

French consumer spending also disappointed, with lockdown measures in November weighing. Spending tumbled by 18.9% in November, reversing a 3.9% rise from October.

While economic data from Germany impressed, an extension to lockdown measures in Germany limited the impact of dated numbers.

France was also considering a reintroduction of lockdown measures, adding further pressure on the EUR.

Approval of the Moderna Inc. vaccine, however, limited the impact of planned containment measures in the week.

For the week, the EUR rose by 0.02% to $1.2218. In the week prior, the EUR had risen by 0.18% to $1.2215.

For the European major indexes, it was another bullish week. The EuroStoxx600 rallied by 3.04%, with the CAC40 and DAX30 gaining 2.80% and 2.41% respectively.

U.S politics and vaccine approvals contributed to the upside for the majors in the week.

For the Loonie

It was a relatively busy week on the economic data front. November trade and December Unemployment figures were key stats in the week.

In November, the trade deficit narrowed from C$3.73bn to C$3.34bn.

Employment figures were skewed to the negative, however, with employment falling by 62.6K. As a result of the decline, Canada’s unemployment rate ticked up by 8.5% to 8.6%.

Other stats in the week included RMPI and Ivey PMI numbers that had a muted impact in the week.

Supporting the upside for the Loonie, however, was a jump in crude oil prices and hopes of more U.S stimulus.

In the week ending 8th January, the Loonie rose by 0.20% to C$1.2702. In the week prior, the Loonie had risen by 1.06% to C$1.2728.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar, following solid gains from the previous week.

In the week ending 8th January the Aussie Dollar rose by 0.82% to $0.7757 with the Kiwi Dollar ending the week up by 0.75% to $0.7242.

For the Aussie Dollar

It was a quiet week on the economic calendar.

November building approvals and trade data were in focus in the week.

It was a mixed bag on the economic data front, however. While building approvals were on the rise, Australia’s trade surplus narrowed from A$7.456bn to A$5.022bn.

In spite of the narrowing, the Aussie Dollar found strong support on optimism towards the economic outlook.

Expectations of more U.S stimulus and the ongoing COVID-19 vaccinations delivered support for riskier assets.

For the Kiwi Dollar

It was also a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

The lack of stats left the Kiwi in the hands of COVID-19 news and U.S politics in the week.

For the Japanese Yen

It was a relatively busy week on the economic calendar. Finalized privates sector PMI figures for December were in focus, along with November household spending data.

The stats were mixed. While the manufacturing and service sector PMIs saw upward revisions, household spending disappointed.

In November, household spending slid by 1.8%, reversing a 2.1% rise from October.

A jump in new COVID-19 cases in Japan added to the negative sentiment in the week.

The Japanese Yen fell by 0.72 % to ¥103.94 against the U.S Dollar. In the week prior, the Yen had risen by 0.22% to ¥103.20.

Out of China

Private sector PMIs for December were in focus in the first half of the week, with the stats skewed to the negative.

In December, the Caixin Manufacturing PMI fell from 54.9 to 53.0, with the services PMI falling from 57.8 to 56.3

While the stats were on the weaker side, the private sector continued to expand at a solid pace.

On the negative, however, was news of U.S plans to delist Chinese entities from the NYSE.

In the week,  the Chinese Yuan rose by 0.81% to CNY6.4746. In the week prior, the Yuan had risen by 0.22% to CNY6.5272.

The CSI300 rallied by 5.45%, with the Hang Seng ended the week up by 2.38%.

The Week Ahead – Post-Brexit, the Senate Race, and Economic Data in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 58 stats in focus in the week ending 8th January. In the week prior, just 15 stats had been in focus.

For the Dollar:

It’s a relatively busy week ahead on the economic data front.

December ISM Manufacturing and Service PMI figures for December are due out on Tuesday and Thursday.

While we expect sensitivity to the manufacturing numbers, the Services PMI will be the key driver.

Expect initial jobless claims figures on Thursday to also draw attention ahead of December NFP numbers on Friday.

With labor market numbers in focus, expect nonfarm payroll figures and the unemployment rate to have the greatest impact.

Other stats include ADP nonfarm employment change, finalized Markit private sector PMI numbers, and factory orders.

The Dollar Spot Index ended the week down by 0.32% to 89.937.

For the EUR:

It’s a particularly busy week ahead on the economic data front.

December manufacturing PMI figures for Spain and Italy are due out at the start of the week.

Expect Italy’s manufacturing PMI to draw the greatest interest. With finalized manufacturing from France, Germany, and the Eurozone also due out, any revisions will also provide direction.

On Tuesday, the focus shifts to retail sales and unemployment figures from Germany.

With consumption key to economic recovery, both will provide the EUR with direction.

On Wednesday, Service sector PMIs for Italy and Spain are due out along. Barring dire numbers, however, the focus will be on finalized numbers from France, Germany, and the Eurozone.

Through the 2nd half of the week, the German economy remains in the spotlight.

November factory orders, industrial production, and trade data are due out on Thursday and Friday.

On Friday, French consumer spending figures for November will also draw attention.

While there will be sensitivity to the stats, the markets may be in a forgiving mood.

The ongoing vaccinations across the EU and beyond and optimism towards the economic outlook will likely limit the impact of any disappointing numbers.

Other stats due out include inflation figures from Germany and Italy and retail sales and unemployment numbers for the Eurozone.

These stats are unlikely to have an impact on the EU, however.

The EUR ended the week up by 0.18% to $1.2215.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar. Key stats include finalized private sector PMI numbers for December and construction PMI figures.

Expect any revisions to the services PMI to have the greatest influence.

Other stats include December house price and 3rd quarter labor productivity figures. We would expect the numbers to have a muted impact on the Pound, however.

COVID-19 and updates from Europe on Britain’s 1st week away from the EU will influence.

The Pound ended the week up by 0.83% to $1.3672.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

November’s RMPI is in focus on Tuesday ahead of trade data and December’s Ivey PMI on Thursday.

While we expect some influence from the numbers, December employment figures on Friday will likely have the greatest impact.

From elsewhere, private sector PMIs will influence sentiment towards the economic outlook. The knock-on effects on crude oil prices would also provide the Loonie with direction.

The Loonie ended the week up by 1.06% to C$1.2728 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week on the economic data front.

November building approval and trade figures are due out on Thursday.

With no other stats to consider, expect the trade figures to garner the greatest interest.

From elsewhere, private sector PMI numbers will also influence market risk sentiment and the Aussie Dollar.

The Aussie Dollar ended the week up by 1.17% to $0.7694.

For the Kiwi Dollar:

It’s another particularly quiet week ahead on the economic calendar. There are no material stats due out to provide the Kiwi Dollar with direction.

Private sector PMIs through the week will influence, however.

The Kiwi Dollar ended the week up by 1.00% to $0.7188.

For the Japanese Yen:

It is a relatively quiet week on the economic calendar.

Finalized private sector PMI figures for December are due out on Monday and Wednesday.

The numbers are unlikely to have any impact on the Yen, however.

At the end of the week, November household spending will draw interest, however.

The Japanese Yen ended the week up by 0.42% to ¥103.20 against the U.S Dollar.

Out of China

It’s a quiet week ahead on the economic data front.

December private sector PMI numbers are due out on Monday and Wednesday.

While service sector numbers will influence, Monday’s Manufacturing PMI will garner the greatest interest.

The Chinese Yuan ended the week up by 0.22% to CNY6.5272 against the U.S Dollar.

Geo-Politics

U.S Politics

U.S politics will likely remain front and center in a relatively busy week ahead on the economic data front.

The Senate race will draw plenty of interest, with the Georgia runoff on 5th January. A Democrat victory would give the Democrats control of both houses of Congress. While the markets would expect more pandemic aid support, other Biden policies could be a concern.

There’s also Trump lingering in the background…

Brexit

It is Britain’s first week outside of the EU. There’s likely to be plenty of news hitting the wires. Some EU member states are likely to attempt to cause as much disruption as possible.

Border controls and trade will be the main area of focus. Any disruption could test support for the Pound.

One other area of interest will be whether some EU states look to forge bilateral ties with Britain.

The Weekly Wrap – Britain Leaves the EU, amidst Optimism towards 2021

The Stats

It was a particularly quiet week on the economic calendar, in the week ending 1st January.

A total of 15 stats were monitored, following 32 stats from the week prior.

Of the 15 stats, 7 came in ahead of forecasts, with 8 economic indicators coming up short of forecasts. There were no stats that were in line with forecasts in the week.

Looking at the numbers, 7 of the stats reflected an upward trend from previous figures. Of the remaining 8 stats, all 8 reflected a deterioration from the previous.

For the Greenback, it was back into the red to mark a 5th weekly loss in 7-weeks. The Dollar Spot Index fell by 0.32% to end the week at 89.937. In the week prior, the Dollar had risen by 0.27% to 90.257.

Out of the U.S

It was a relatively busy week on the economic data front.

Key stats included November goods trade data, Chicago PMI, and weekly jobless claims figures.

In December, the Chicago PMI rose from 58.2 to 59.5, while the goods trade deficit widened from $80.42bn to $84.82bn.

Also positive was a fall in jobless claims figures. In the week ending 25th December, U.S jobless claims fell back from 806k to 787k.

The jobless claims figures supported the U.S equity markets on the final day of the year.

Other stats included housing sector figures that also failed to move the dial.

In the equity markets, the S&P500 and Dow rose by 1.43% and by 1.35% respectively. The NASDAQ saw a more modest 0.65% gain in the week.

Out of the UK

It was a quiet week on the economic data front.

House price figures for December were the only stats from the UK in the week.

In spite of an uptick in house prices, the numbers had a muted impact on the Pound.

Support came from the Brexit deal and the House of Commons and House of Lords vote in favor of the Bill.

In the week, the Pound rose by 0.85% to $1.3672. In the week prior, the Pound had risen by 0.27% to $1.3560

The FTSE100 ended the week down by 0.64%, reversing a 0.27% loss from the previous week.

Out of the Eurozone

It was also a quiet week on the economic data front.

Key stats included job seeker figures from France and prelim December inflation figures from Spain.

Neither had an impact on the EUR, however, with optimism towards a 2021 economic recovery supporting the EUR.

The combination of a Brexit deal and the rollout of vaccines across the bloc were key drivers.

For the week, the EUR rose by 0.18% to $1.2215. In the week prior, the EUR had fallen by 0.52% to $1.2193.

For the European major indexes, it was a bullish week. The CAC40 and EuroStoxx600 rose by 0.53% and by 0.77% respectively, with the DAX30 gaining 0.97%.

For the Loonie

It was a particularly quiet week on the economic data front. There were no key stats from Canada to provide the Loonie with direction.

Optimism towards a 2021 economic recovery supported crude oil prices and the Loonie in the week.

U.S stimulus, monetary policy, and the rollout of the COVID-19 vaccines were positive for market risk appetite.

Private sector PMI numbers from China failed to impact, in spite of a marginal softening in private sector activity.

In the week ending 1st January, the Loonie rose by 1.06% to C$1.2728. In the week prior, the Loonie had fallen by 0.60% to C$1.2865.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar, which reversed losses from the week prior.

In the week ending 1st January, the Aussie Dollar rallied by 1.17% to $0.7694, with the Kiwi Dollar ending the week up by 1.00% to $0.7188.

For the Aussie Dollar

It was a particularly quiet week on the economic calendar.

There were no material stats from Australia to provide the Aussie Dollar with direction in the week.

The lack of stats left the Aussie Dollar in the hands of market risk sentiment.

COVID-19 vaccinations across key economies and expectation of further relief packages in the US drove demand for riskier assets. Commodity prices were also on the rise in the week as a result. The Bloomberg Commodity Index rose by 1.34% in the week.

For the Kiwi Dollar

It was also a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

The lack of stats left the Kiwi in the hands of market risk sentiment.

For the Japanese Yen

It was a relatively quiet week on the economic calendar. Prelim industrial production figures for November were in focus.

Following an impressive 4% rise in October, production stalled in November.

Impact on the Yen was limited, however, as Dollar support waned in the week.

The Japanese Yen rose by 0.22% to ¥103.20 against the U.S Dollar. In the week prior, the Yen had fallen by 0.13% to ¥103.43.

Out of China

Private sector PMIs for December were in focus late in the week.

On Thursday, the NBS Manufacturing PMI fell from 52.1 to 51.9, with the services PMI falling from 56.4 to 55.7. As a result, the Composite PMI fell from 55.7 to 55.1.

The impact on the markets was relatively muted with a number of key markets closed on the day.

In the week ending 1st January, the Chinese Yuan rose by 0.22% to CNY6.5272. In the week prior, the Yuan had fallen by 0.03% to CNY6.5418.

The CSI300 rallied by 3.36%, with the Hang Seng ended the week up by 3.20%.

The Week Ahead – Brexit, Capitol Hill, and COVID-19 Remain in Focus

On the Macro

It’s a particularly quiet and shortened week ahead on the economic calendar, with 15 stats in focus in the week ending 1st January. In the week prior, 32 stats had been in focus.

For the Dollar:

It’s a relatively busy week ahead on the economic data front, with U.S stats making up for most of the stats due out.

On Tuesday, Chicago PMI numbers are due out on Wednesday.

Of greatest significance, however, are the all-important initial jobless claims figures that are due out on Thursday.

Other stats including housing sector and trade data that will likely have a muted impact on the Dollar.

It’s a shortened week, with the U.S markets closed on Friday.

The Dollar Spot Index ended the week up by 0.23% to 90.223.

For the EUR:

It’s a particularly quiet week ahead on the economic data front, with most European markets closed on Thursday and Friday. French jobseeker totals on Monday and prelim inflation figures for Spain on Wednesday are the only stats to consider.

We don’t expect the numbers to have a material impact on the EUR, however.

Economic data from China and Brexit and COVID-19 news will remain the key drivers in the week.

The EUR ended the week down by 0.52% to $1.2193.

For the Pound:

It’s a particularly quiet week ahead on the economic calendar. It’s another shortened week, with the UK markets closed on Monday and Friday and set for an early close on Thursday.

Key stats are limited to December house price figures that will likely have a muted impact on the Pound.

The main area of focus in the week will remain Brexit and updates on COVID-19. For the Pound, the House of Commons vote on 30th December will be the main event.

The Pound ended the week up by 0.27% to $1.3560.

For the Loonie:

It’s also a particularly quiet week ahead on the economic calendar, with no material stats to provide direction.

The lack of stats will leave the Loonie in the hands of COVID-19 news updates in the week.

It’s a shortened week, with the Canadian markets closed on Monday and on Friday.

The Loonie ended the week down by 0.60% to C$1.2865 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

There are no material stats due out to provide the Aussie Dollar with direction.

From China, private sector PMI numbers for December will draw interest on Thursday and Friday, however. With the Australian markets closed on Friday and scheduled for an early close on Thursday, we could see a bigger response than normal. The Australian markets are also closed on Monday.

Away from the economic calendar, expect COVID-19 news to also influence.

The Aussie Dollar ended the week down by 0.22% to $0.7605.

For the Kiwi Dollar:

It’s a particularly quiet week ahead on the economic calendar. There are no material stats due out to provide the Kiwi Dollar with direction.

From China, private sector PMI numbers for December will draw interest on Thursday and Friday, however.

It’s a shortened week, with New Zealand also on holiday on Monday and Friday and set for an early close on Thursday.

The Kiwi Dollar ended the week down by 0.27% to $0.7117.

For the Japanese Yen:

It is a relatively quiet week on the economic calendar.

Prelim industrial production figures for November are due on Monday.

With a number of major markets closed, we can expect some sensitivity to the numbers, with volumes on the lighter side.

Away from the economic calendar, COVID-19 news will continue to influence.

The Japanese Yen ended the week down by 0.13% to ¥103.43 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

December private sector PMI numbers are due out on Thursday and Friday.

The markets preferred Caixin Manufacturing PMI is due out on Friday, however, when most major markets are closed for New Year’s Day.

The Chinese Yuan ended the week down by 0.03% to CNY6.5418 against the U.S Dollar.

Geo-Politics

U.S Politics

With the U.S on holiday, there shouldn’t be too much to rock the boat in a shortened week ahead.

How the stimulus package proceeds on Capitol Hill will draw interest, however. Following Trump’s refusal to sign the bill, lawmakers refused to accept Trump’s demands last week. The markets are expecting a major package once Biden enters the White House. An interim package is going to be needed, however, to avoid risk aversion and a pickup in demand for the Greenback.

While the package is the main area of focus, President Trump continues to raise eyebrows. He seems unwilling to leave quietly…

Brexit

Boris Johnson delivered what other Prime Ministers failed to deliver last week. In the week ahead, the details of the deal and, more importantly, the parliamentary vote will be the main event.

Reports over the weekend suggest that the Brexit agreement should sail through the House of Commons. With the transition period ending in less than 1-week, there’s no time to make any changes…

The Weekly Wrap – Brexit, COVID-19, and Capitol Hill Provided Direction

The Stats

It was a particularly quiet week on the economic calendar, in the week ending 25th December.

A total of 32 stats were monitored, following 92 stats from the week prior.

Of the 32 stats, 12 came in ahead of forecasts, with 19 economic indicators came up short of forecasts. 1 stat was in line with forecasts in the week.

Looking at the numbers, 10 of the stats reflected an upward trend from previous figures. Of the remaining 22 stats, 20 reflected a deterioration from the previous.

For the Greenback, it was back into the green to mark just a 2nd weekly gain in 6-weeks. The Dollar Spot Index rose by 0.23% to end the week at 90.223. In the week prior, the Dollar had fallen by 1.16% to 89.924.

Out of the U.S

It was a relatively busy week on the economic data front.

Key stats included November personal spending figures, December consumer confidence, core durable goods orders, and weekly jobless claims figures.

Consumer confidence fell from 96.1 to 88.6. Concerns over the sharp increase in new COVID-19 cases weighed on consumer’s assessment of current conditions.

In the week ending 18th December, initial jobless claims stood at 805k, falling back from an upwardly revised 892k from the previous week.

Durable goods orders were also positive, with orders rising by 0.9% in November, following a 1.8% increase in October. Core durable goods fell short of forecasts, rising by 0.4%. In October, core durable goods orders had increased by 1.9%.

On the negative, however, was a fall in personal spending. Personal spending fell by 0.4%, reversing a 0.3% rise in October. Economists had forecast a 0.2% decline.

Other stats included inflation, housing sector, and finalized 3rd quarter GDP and consumer sentiment numbers. These stats had a muted impact on the Dollar and the markets, however.

In the equity markets, the S&P500 fell by 0.17%, while the Dow and the NASDAQ ending the week with gains of 0.07% and 0.38% respectively.

Out of the UK

It was a relatively busy week on the economic data front.

Finalized 3rd quarter GDP and business investment figures were in focus on Tuesday.

An upward revision to 3rd quarter GDP figures provided  early temporary relief for the Pound.

The economy expanded by 16%, reversing most of a 19.8% contraction from the 2nd quarter.

Business investment was also revised up from a prelim 8.8%. A 9.4% rise in the 3rd quarter was not enough to reverse a 26.5% slump from the 2nd quarter, however.

While the stats influenced in the early part of the week, Brexit and COVID-19 news remained the key drivers.

A new coronavirus strain led to the reintroduction of lockdown measures, amidst Brexit uncertainty, which weighed on the Pound early in the week.

A Brexit deal late in the week, however, supported a return to $1.35 levels to end the week in the green. The Pound had fallen to $1.33 levels before the recovery.

In the week, the Pound rose by 0.27% to $1.3560. In the week prior, the Pound had rallied by 2.27% to $1.3524.

The FTSE100 ended the week down by 0.41%, following a 0.27% loss from the previous week.

Out of the Eurozone

It was a quiet week on the economic data front.

Key stats included Flash Eurozone Consumer Confidence and German GfK Consumer Climate figures.

For the Eurozone, the Flash Consumer Confidence Indicator rose from -17.6 to -13.9. In spite of the uptick, the indicator remained well below its long-run average of -11.2, however.

From Germany, the GfK Consumer Climate Indicator fell from -6.7 to -7.3 in January. Economists had forecasted a larger decline to -8.8. A fall in income expectations weighed on the headline figure, with the latest spike in new COVID-19 cases and lockdown measures raising uncertainty.

On Wednesday, finalized 3rd quarter GDP figures from Spain had a muted impact on the majors.

Spain’s economy expanded by 16.4% in the 3rd quarter, according to finalized figures, revised down from a prelim 16.7%. In the 2nd quarter, the economy had contracted by 17.9%, quarter-on-quarter.

For the week, the EUR fell by 0.52% to $1.2193. In the week prior, the EUR had risen by 1.20% to $1.2257.

For the European major indexes, it was a mixed week. The CAC40 and DAX30 fell by 0.32% and by 0.10% respectively, while the EuroStoxx600 rose by 0.02%.

For the Loonie

It was a quieter week on the economic data front. Key stats included October GDP figures.

The economy expanded by 0.4% in October, following a 0.8% expansion in September. Economists had forecast 0.3% growth.

In spite of the better than expected numbers, softer growth pinned the Loonie back. Concerns over the continued rise in new COVID-19 cases and new strains added further pressure, with crude oil prices hitting reverse in the week.

In the week ending 11th December, the Loonie fell by 0.60% to C$1.2865. In the week prior, the Loonie had fallen by 0.15% to C$1.2788.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 25th December, the Aussie Dollar fell by 0.22% to $0.7605, with the Kiwi Dollar ending the week down by 0.27% to $0.7117.

For the Aussie Dollar

It was a quiet week on the economic calendar.

Key stats included Australia retail sales and private sector credit figures for November.

Retail sales jumped by 7% in November, according to prelim figures, coming in well ahead of a forecasted 0.6% decline. In October, retail sales had risen by 1.4%.

Private sector credit also saw a pickup in November, rising by 0.1%. Credit was down by 1.7% year-on-year.

The impact of the stats on the Aussie was relatively muted, however, as the markets grappled with news of the new coronavirus strains.

For the Kiwi Dollar

It was a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

The lack of stats left the Kiwi in the hands of COVID-19 news through the week, leading to the pullback.

For the Japanese Yen

It was a relatively busy week on the economic calendar. There were no economic data out until Friday, however. The stats had a muted impact on the Yen.

In November, retail sales rose by 0.7%, following an 11.90% jump in October, Economists had forecast a 1.7% rise.

The Japanese Yen fell by 0.13% to ¥103.43 against the U.S Dollar. In the week prior, the Yen had risen by 0.71% to ¥103.30.

Out of China

The PBoC was in action at the start of the week. In line with market expectations, however, the PBoC left loan prime rates unchanged.

A lack of stats and status quo on the monetary policy front left the Yuan in limbo for the week.

In the week ending 25th December, the Chinese Yuan fell by 0.03% to CNY6.5418. In the week prior, the Yuan had fallen by 0.10% to CNY6.5400.

The CSI300 rose by 0.84%, while the Hang Seng ended the week down by 0.42%.

The Week Ahead – COVID-19 Vaccine News, Brexit, and U.S Stimulus in Focus

On the Macro

It’s a quiet and shortened week ahead on the economic calendar, with 31 stats in focus in the week ending 25th December. In the week prior, 92 stats had been in focus.

For the Dollar:

It’s another busy week ahead on the economic data front, however, with U.S stats making up the lion’s share of the calendar.

On Tuesday, finalized 3rd quarter GDP and November existing home sales figures are due out.

Barring a marked downward revision to GDP numbers, the stats should have a muted impact on the Dollar.

On Wednesday, November inflation, personal spending, and new home sales figures are due out. Expect inflation and personal spending figures to garner the greatest interest.

Finalized consumer sentiment figures for December are also due out, which should have limited influence.

On Thursday, November core durable goods and durable goods orders are due out along with the weekly jobless claims figures.

In a shortened session, expect the core durable goods orders and jobless claims figures to have the greatest impact on market risk sentiment.

Away from the economic calendar, Capitol Hill remains a key area of interest.

The Dollar Spot Index ended the week down by 1.06% to 90.016.

For the EUR:

It’s a particularly quiet week ahead on the economic data front, with most European markets closed on Thursday and Friday. Just France and Spain have a shortened session on Thursday, with Germany and Italy closed on both days.

Flash Eurozone consumer confidence figures will draw interest on Monday. An upward movement is expected, with COVID-19 vaccine news to provide support.

On Tuesday, GfK Consumer Climate figures for January are due out, which will likely provide further EUR support. COVID-19 vaccine news should also support a pickup in consumer sentiment at the turn of the year.

Finalized 3rd quarter GDP numbers from Spain, however, should have a muted impact on the EUR on Wednesday.

Away from the economic calendar, COVID-19 and Brexit news will also influence.

The EUR ended the week up by 1.20% to $1.2257.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

Finalized 3rd quarter GDP numbers are due out on Tuesday, along with current account and finalized business investment figures.

Barring marked revisions from prelim estimates, the markets will likely brush aside the stats in the week.

Away from the economic calendar, updates on Brexit and COVID-19 will influence before the holidays.

The Pound ended the week up by 2.27% to $1.3524.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

On Wednesday, October GDP figures are due out ahead of November building permit numbers on Thursday.

Expect the GDP figures to garner the greatest interest.

It’s a shortened week for the Loonie, with the Canadian market on a shortened day on Thursday and closed on Friday.

Away from the economic calendar, COVID-19 vaccine news and updates from Capitol Hill will also influence.

The Loonie ended the week down by 0.15% to C$1.2788 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quiet week ahead on the economic calendar.

Retail sales figures for November are due out on Tuesday. Expect plenty of influence from the retail sales figures in the early part of the week.

COVID-19 vaccine news updates and sentiment towards the economic outlook will be the key driver in a shortened week.

Late last week, news of a COVID-19 cluster in Sydney weighed on the Aussie Dollar. Expect further updates from the weekend to also influence.

The Aussie Dollar ended the week up by 1.18% to $0.7622.

For the Kiwi Dollar:

It’s a particularly quiet week ahead on the economic calendar.

There are no material stats due out in a shortened week to provide the Kiwi Dollar with direction.

The lack of stats will leave the Kiwi Dollar in the hands of COVID-19 news updates and geopolitics.

It’s also a shortened, with the Kiwi markets on an early close on Thursday and closed on Friday.

The Kiwi Dollar ended the week up by 0.73% to $0.7136.

For the Japanese Yen:

It is a relatively busy week on the economic calendar.

December inflation figures are due out along with November retail sales and employment figures on Friday.

With other major markets closed on the day, lower volumes will likely make the Yen more sensitive to the numbers.

Expect November retail sales figures to have the greatest impact.

Away from the economic calendar, COVID-19 news updates will remain a key driver.

The Japanese Yen ended the week up by 0.71% to ¥103.30 against the U.S Dollar.

Out of China

It’s a quiet week ahead on the economic data front, with no economic data due out to influence risk sentiment.

The PBoC is in action at the start of the week, however, though the markets are expecting Loan Prime Rates to remain unchanged.

The Chinese Yuan ended the week up by 0.10% to CNY6.5400 against the U.S Dollar.

Geo-Politics

U.S Politics

With the holidays rapidly approaching, government funding and the stimulus package remain high on the agenda.

Expect plenty of market sensitivity to political updates from Capitol Hill. There was a lack of progress on Saturday, which could test risk appetite should lawmakers fail to make inroads on Sunday.

Brexit

There are less than 2-weeks remaining for Britain and the EU to come up with an agreement.

While the transition period ends on 31st December, however, talks would likely continue if an agreement isn’t reached. It may be of little consolation for the Pound in the week ahead, however.

Much will depend on the messaging between now and the holidays. Until now, the EU has looked to place a more positive spin on talks. A similar sentiment from the British government should, therefore, be Pound positive.

Going into today, there was nothing positive to suggest a deal before the holidays…

The Weekly Wrap – COVID-19 Vaccine, Brexit, Stimulus Talks, and Stats Were in Focus

The Stats

It was a particularly busy week on the economic calendar, in the week ending 18th December.

A total of 92 stats were monitored, following 52 stats from the week prior.

Of the 92 stats, 46 came in ahead of forecasts, with 35 economic indicators came up short of forecasts. 11 stats were in line with forecasts in the week.

Looking at the numbers, 48 of the stats reflected an upward trend from previous figures. Of the remaining 44 stats, 39 reflected a deterioration from previous.

For the Greenback, it was back into the red, to mark the 4th week in the red from the last 5-weeks. The Dollar Spot Index slid by 1.16% to end the week at 89.924. In the week prior, the Dollar had risen by 0.31% to 90.980.

Progress towards a COVID-19 stimulus package on Capitol Hill and a dovish FED contributed to the Dollar’s demise.

Upbeat COVID-19 vaccine news also supported riskier assets that weighed on the Dollar.

Out of the U.S

It was a busy week on the economic data front.

At the start of the week, industrial production figures showed slower output in November.

Retail sales figures for November, also disappointed, with core retail sales and retail sales on the slide. Core retail sales fell by 0.9%, with retail sales falling by 1.1%.

Adding to the negative sentiment ahead of the FED were disappointing service sector PMI numbers.

In December, the service sector PMI fell from 58.4 to 55.3, reflecting the effects of the spike in new COVID-19 cases.

On Thursday, weekly jobless claims and Philly FED Manufacturing figures wrapped up a busy week.

Yet another red flag on the labor market front, with initial jobless claims jumping to 885k in the week ending 11th December.

Philly FED manufacturing numbers also disappointed, with the Index falling from 26.3 to 11.1.

On Wednesday, the FED added to the negative sentiment towards the Dollar, delivering a dovish tone.

While holding monetary policy unchanged and revising up growth forecasts, the promise of holding bond purchases and interest rates at current levels weighed.

In the equity markets, the S&P500 rose by 1.25%, with the Dow and the NASDAQ ending the week with gains of 0.44% and 3.05% respectively.

Out of the UK

It was also a busy week on the economic data front.

Employment figures on Tuesday disappointed, with claimant counts and the unemployment rate on the rise.

On Wednesday, the focus shifted to inflation and private sector PMI numbers.

The stats were skewed to the negative once more. Inflationary pressures eased in November, with the services sector contracting in December.

With the stats skewed to the negative, the focus then shifted to the BoE on Thursday.

In line with market expectations, the BoE left monetary policy unchanged, citing economic uncertainties.

At the end of the week, November retail sales figures wrapped things up. While the numbers were positive relative to forecasts, the figures reflected the reintroduction of lockdown measures.

Month-on-month, core retail sales fell by 2.6%, with retail sales tumbling by 3.8%.

While the stats were skewed to the negative, agreement to continue Brexit negotiations drove demand for the Pound.

In the week, the Pound rallied by 2.27% to $1.3524. In the week prior, the Pound had fallen by 1.61% to $1.3224.

The FTSE100 ended the week down by 0.27%, following a 0.05% loss from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Prelim private sector PMI numbers for December were the main area of focus in the week.

Better than expected PMIs from France, Germany, and the Eurozone provided EUR support.

In December, Germany’s manufacturing PMI hit a 34-month high of 58.6. Coupled with a return to expansion in France, the Eurozone’s manufacturing PMI rose from 53.8 to 55.5.

Service sector activity remained a drag, however. In spite of a slower rate of contraction, the Eurozone’s composite came in at 49.8, up from 45.3 in November.

At the end of the week, Germany’s IFO Business Climate Index figures also drew attention.

In December, the Business Climate Index rose from 90.9 to 92.1, with the Business Expectations sub-Index up from 91.8 to 92.8. The Current Assessment sub-Index also got a boost, rising from 90.0 to 91.3.

Economic resilience and less skepticism towards the next 6-months supported the pickup in December. The upside came in spite of certain sectors being impacted by fresh lockdown measures.

With the stats skewed to the positive, hopes of vaccine approvals by the EMA next week added support for the EUR and the European majors.

For the week, the EUR rose by 1.20% to $1.2257. In the week prior, the EUR had fallen by 0.07% to $1.2112.

For the European major indexes, it was a bullish week. The DAX30 led the way, rallying by 3.94%, with the CAC40 and the EuroStoxx600 rising by 0.37% and by 1.48% respectively.

For the Loonie

It was a busier week on the economic data front. Key stats included November inflation and October retail sales figures.

A pickup in inflationary pressures in November delivered support mid-week. The annual rate of core inflation picked up from 1.0% to 1.5%.

At the end of the week, retail sales and core retail sales were skewed to the negative, however. Core retail sales were flat in October, after a 1% rise in September. Retail sales rose by 0.4%, easing from a 1.1% rise in September.

In the week ending 11th December, the Loonie fell by 0.15% to C$1.2788. In the week prior, the Loonie had risen by 0.12% to C$1.2769.

Elsewhere

It was another bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 18th December, the Aussie Dollar rose by 1.18% to $0.7622, with the Kiwi Dollar ending the week up by 0.73% to $0.7136.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included November employment figures. Another pickup in employment led to a fall in the unemployment rate from 7.0% to 6.8%.

The fall in unemployment came in spite of a rise in the participation rate, another boost for the Aussie Dollar.

On the monetary policy front, the RBA meeting minutes had a relatively muted impact on the Aussie Dollar. There were no major surprises, with the RBA likely to leave cash rates unchanged for at least 3-years.

Progress towards a global COVID-19 vaccine also delivered support for riskier assets.

For the Kiwi Dollar

It was a busier week on the economic calendar.

Key stats included consumer and business confidence, trade, and GDP figures.

The stats were skewed to the positive supporting the Kiwi Dollar’s return to $0.71 levels.

In the 4th quarter, consumer confidence saw a marked increase, with business confidence turning positive in December.

GDP figures also impressed, with the economy expanding by 14% in the 3rd quarter. In the 2nd quarter, the economy had contracted by 11%.

While a widening in the trade surplus was also positive, a slide in imports contributed to the widening. COVID-19 vaccinations and a return to normal at NZ ports should support a rebound in imports, however.

For the Japanese Yen

It was a particularly busy week on the economic calendar.

At the start of the week, Tankan survey figures were in focus and skewed to the positive. Private sector conditions improved in the 4th quarter.

The Large Manufacturers Index rose from -27 to -10, with the Large Non-Manufacturers Index rising from -12 to -5.

Trade data and private sector PMI figures disappointed mid-week, however.

In November, the trade surplus narrowed from ¥871.7bn to ¥366.8bn, with exports sliding by 4.2%.

While the service and manufacturing PMIs saw a slight rise in December, both sectors continued to contract.

Wrapping things up at the end of the week were inflation figures that were also negative. Deflationary pressures picked up in November, with core consumer prices falling by 0.9%. In October, core consumer prices had fallen by 0.7%.

On the monetary policy front, the BoJ left policy unchanged at the end of the week, while extending COVID-19 support measures by an additional 6-months.

The Japanese Yen rose by 0.71% to ¥103.3 against the U.S Dollar. In the week prior, the Yen had risen by 0.12% to ¥104.04.

Out of China

Industrial production, retail sales, and unemployment figures for November were in focus early in the week.

The stats were skewed to the positive, supporting riskier assets.

Year-on-year, industrial production rose by 7.0%, following a 6.9% increase in October. Retail sales increased by 5%, following a 4.3% rise in October, supported by improving employment conditions.

The unemployment rate fell from 5.3% to 5.2% in the month.

In the week ending 18th December, the Chinese Yuan fell by 0.10% to CNY6.5400. In the week prior, the Yuan had fallen by 0.23% to CNY6.5463.

The CSI300 rose by 2.26%, while the Hang Seng ended the week down by 0.03%.

Pharmaceutical Giant AstraZeneca’s Shares Slump Over 9% on $39 Billion Alexion Acquisition Deal

AstraZeneca’s shares slumped more than 9% on Monday after the global pharmaceuticals company announced over the weekend to acquire Alexion Pharmaceuticals for $39 billion or $175 per share in cash and stock.

That would be the biggest deal ever for the UK-based global pharmaceuticals company, but the company’s relative shortage of cash raised eyebrows.

According to the deal, Alexion shareholders will receive $60 in cash and nearly $115 worth of equity per share. The acquisition is expected to close in the third quarter of next year, and upon completion, Alexion shareholders will own c.15% of the combined company, AstraZeneca said in the statement.

“We expect it will take time for investors to digest the possible merits of the $39 billion cash-stock Alexion acquisition. There is a strategic rationale and valuation is reasonable, in our view, but the debate will likely focus on the sustainability of Alexion’s key C5i franchise and the significant boost to cash flow generation but slightly diluted pro-forma growth profile,” noted Peter Welford, equity analyst at Jefferies.

“We estimate +15% EPS accretion 2022-24E, with pro-forma +10% sales and +16.5% EPS CAGR 2021-25E,” Welford added.

AstraZeneca’s shares plunged to an eight-month low of GBX 7410 on Monday; the stock is up about 2% so far this year.

Analyst Comments

“A concern is what this deal tells us about AstraZeneca’s view of its own business, particularly beyond 2024-25 (we model through 2025), when Brilinta and Forxiga lose patents, and Tagrisso could see competition (although AstraZeneca stated it believes analyst consensus for both AstraZeneca and Alexion is conservative). But great companies don’t sit still; they adapt and evolve, as AstraZeneca is doing with this transaction,” said Steve Scala, equity analyst at Cowen and Company.

“The sustainability of the Alexion franchise is another risk, but we believe the concern is overblown as most sales will be transferred from Soliris to Ultomiris by the time Soliris biosimilars launch. On the branded side, no branded competitor has produced a profile as good as Ultomiris, so we think competitors will have an uphill battle taking share. Lastly, AstraZeneca would appear limited in its flexibility to do additional, sizable M&A anytime soon,” Scala added.

AstraZeneca Stock Price Forecast

Fourteen equity analysts forecast the average price in 12 months at 9,163.33p with a high forecast of 12,000p and a low forecast of 6,400p. The average price target represents an 18.80% increase from the last price of 7,713p. From those 14 analysts, nine rated “Buy”, four rated “Hold” and one “Sell”, according to Tipranks.

AstraZeneca received a GBX 9,900 price objective from equities researchers at Morgan Stanley. The firm currently has a “buy” rating on the biopharmaceutical company’s stock. UBS Group set a GBX 7,500 price target and gave the stock a “neutral” rating. Credit Suisse Group set a GBX 9,500  target price and gave the stock a “buy” rating. Jefferies Financial Group set a GBX 8,500 target price and gave the stock a “neutral” rating.

The Week Ahead – Brexit, COVID-19, Monetary Policy, Economic Data, and Capitol Hill in Focus

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 95 stats in focus in the week ending 18th December. In the week prior, 52 stats had been in focus.

For the Dollar:

It’s a busy week ahead on the economic data front.

In the 1st half of the week, November retail sales and December private sector PMIs are due out, along with industrial production and NY Empire State Manufacturing figures.

Expect retail sales and service sector PMIs to be the key drivers on Tuesday and Wednesday.

The focus will then shift to Philly FED Manufacturing PMI and weekly jobless claims figures on Thursday.

Expect the initial jobless claims figures to garner the greatest interest in the day.

On the monetary policy front, the FED is also in action on Wednesday.

While the FED is expected to leave interest rates unchanged, an expansion to the bond purchasing program could be on the cards.

Also of interest, however, will be the FED’s interest rate projections and economic projections.

The Dollar Spot Index ended the week up by 0.30% to 90.976.

For the EUR:

It’s a busy week ahead on the economic data front.

In the 1st half of the week, October industrial production figures for the Eurozone and finalized inflation figures from Italy and France are due out.

Expect industrial production figures to have the greatest influence.

Mid-week, the focus will shift to prelim December private sector PMI numbers for France, Germany, and the Eurozone.

Expect plenty of influence from the PMI numbers, with any deterioration likely to weigh on risk sentiment.

In the 2nd half of the week, German IFO Business Climate index figures for December will also influence on Friday.

Away from the economic calendar, chatter from Capitol Hill, Brexit, and COVID-19 vaccination news will also provide direction.

The EUR ended the week up by 0.07% to $1.2112.

For the Pound:

It’s a busy week ahead on the economic calendar.

In the 1st half of the week, claimant count, wage growth, employment change, and unemployment figures are in focus.

Expect claimant counts and the unemployment rate to be the key drivers.

Mid-week, November inflation figures will also garner interest ahead of a busy 2nd half of the week.

November retail sales figures are due out, which will draw plenty of interest.

The main event of the week, however, is the BoE monetary policy decision on Thursday.

There has been the talk of negative rates, the markets will get an idea of what to expect, particularly with some degree of clarity on Brexit by Thursday…

While the markets are expecting the BoE to leave rates unchanged, forward guidance will, therefore, be key.

The Pound ended the week down by 1.61% to $1.3224.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

On Wednesday, November inflation figures are due out ahead of October retail sales figures on Friday.

Other stats in the week include housing start and manufacturing and wholesale sales figures. We would expect these numbers to have a muted impact on the Loonie, however.

Away from the economic calendar, expect FED monetary policy, U.S stimulus talks, and COVID-19 news to also influence.

The Loonie ended the week up by 0.12% to C$1.2769 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead on the economic calendar.

November employment change figures, due out at the end of the week, will draw plenty of interest.

New home sales figures due out on Wednesday will have a muted impact on the Aussie Dollar, however.

From elsewhere, expect chatter from Capitol Hill and COVID-19 vaccine news to also provide direction.

The Aussie Dollar ended the week up by 1.45% to $0.7533.

For the Kiwi Dollar:

It’s a relatively busy week ahead on the economic calendar.

3rd quarter GDP figures on Thursday and November trade data on Friday will be the key drivers.

Away from the economic calendar, however, expect any rise in U.S – China tensions to overshadow any positive numbers.

The Kiwi Dollar ended the week up by 0.51% to $0.7084.

For the Japanese Yen:

It is a busy week on the economic calendar.

4th quarter Tankan survey numbers are due out at the start of the week, along with finalized industrial production figures for October.

While the numbers will draw interest, the impact on the Yen will likely be relatively muted.

On Wednesday, November trade data will influence, with the markets looking for improved trade terms ahead of the BoJ monetary policy decision on Friday.

At the end of the week, November inflation figures will likely have a muted impact on the Yen, however.

On Friday, the BoJ will likely stand pat once more, with a COVID-19 vaccine easing pressure to deliver more support.

That should leave the Yen in the hands of COVID-19 news and stimulus talk on Capitol Hill.

The Japanese Yen ended the week up by 0.12% to ¥104.04 against the U.S Dollar.

Out of China

It’s another relatively busy week ahead on the economic data front.

At the start of the week, new loans will draw interest ahead of a busy Tuesday.

On Tuesday, November fixed asset investment, industrial production, retail sales, and unemployment figures are due out.

Expect industrial production, retail sales, and unemployment figures to have the greatest influence.

Away from the economic calendar, chatter from Beijing and Capitol Hill will also provide riskier assets with direction.

The Chinese Yuan ended the week down by 0.23% to CNY6.5463 against the U.S Dollar.

Geo-Politics

U.S Politics

Late into the day on Friday, lawmakers extended federal funding for another week. While averting a government shutdown, there was a failure to deliver a stimulus package.

With the U.S continuing to reel from the rising number of COVID-19 cases, labor market conditions have deteriorated.

Progress in the week is going to be needed as will a resolution to government funding before Christmas.

On the COVID-19 vaccine front, the FDA is also due to review the Moderna Inc. vaccine in the week ahead. Expect more pressure from the Whitehouse to deliver a much-needed 2nd vaccine.

Brexit

Sunday’s Brexit deadline will decide the near-term fate of Britain and its trade terms with the EU.

With key differences remaining and limited time to resolve the remaining issues, expectations are for talks to continue in the New Year should both sides fail to reach an agreement ahead of the Sunday deadline.

While the hope of an eventual deal could limit the damage there will likely be some fallout from a no-deal Brexit.

The Weekly Wrap – It was a Busy Week, with Brexit News Sinking the Pound

The Stats

It was a relatively busy week on the economic calendar, in the week ending 11th December.

A total of 52 stats were monitored, following 82 stats from the week prior.

Of the 52 stats, 30 came in ahead of forecasts, while 18 economic indicators came up short of forecasts. 4 stats were in line with forecasts in the week.

Looking at the numbers, 29 of the stats reflected an upward trend from previous figures. Of the remaining 23 stats, 18 reflected a deterioration from previous.

For the Greenback, it was the 1st weekly gain in 4-weeks. The Dollar Spot Index rose by 0.30% to end the week at 90.976. In the week prior, the Dollar had fallen by 1.07% to 90.805.

Concerns over the economic recovery, a deterioration in labor market conditions, and a spike in new COVID-19 cases supported the demand for the Greenback.

A failure by lawmakers to deliver a COVID-19 stimulus package on Capitol Hill added to Dollar demand.

Out of the U.S

It was a quieter week on the economic data front.

On Wednesday, JOLTs job openings for October were in focus. A pickup in job openings failed to drive demand for riskier assets, however.

In the 2nd half of the week, November inflation and jobless claims figures drew more attention.

While the annual rate of core inflation held steady at 1.6%, jobless claims spooked the markets on Thursday.

In the week ending 4th December, jobless claims jumped from 716k to 853k.

Wholesale inflation and December consumer sentiment figures wrapped up the week.

The focus was on consumer sentiment, with the Michigan Consumer Sentiment Index rising from 76.9 to 81.4 in December.

With the market focus on Brexit and Capitol Hill, however, the figures had a muted impact on market risk sentiment.

In the equity markets, the S&P500 fell by 0.96%, with the Dow and the NASDAQ ending the week down by 0.57% and by 0.69% respectively.

Out of the UK

It was a relatively busy week on the economic data front.

Key stats included industrial and manufacturing production and GDP figures for October.

It was a mixed bag on the data front. While industrial and manufacturing production impressed, GDP figures were skewed to the negative.

In October, the economy grew by just 0.4%, following a 1.1% expansion in September. The 3-month rolling GDP came in at 10.2%, easing back from 15.5% in September.

NIESR GDP numbers also disappointed, with the NIESR GDP Estimate coming in at 1.5%, down from a previous 10.3%.

While the stats influenced, Brexit remained the key driver in the week. The Pound hit reverse as a result of a lack of progress, with Johnson and Ursula von der Leyen agreeing to a Sunday deadline.

In the week, the Pound slid by 1.61% to $1.3224. In the week prior, the Pound had risen by 0.98% to $1.3441.

The FTSE100 ended the week down by 0.05%, following on from a 2.87% gain in the previous week.

Out of the Eurozone

It was a relatively busy week on the economic data front.

In the 1st half of the week, industrial production figures for Germany and ZEW Economic Sentiment figures for Germany and the Eurozone were in focus.

The stats were skewed to the positive. Industrial production jumped by 3.2%, with sentiment also improving.

Germany’s ZEW Economic Sentiment Index rose from 39.0 to 55.0, with the Eurozone’s rising from 32.8 to 54.4.

Progress towards a COVID-19 vaccine led to a marked improvement in sentiment.

In the second half of the week, German trade data and finalized inflation figures from Spain and Germany had a muted impact, however.

On the monetary policy front, the ECB weighed on the European majors, with downward revisions to growth for next year. In response to the gloomier outlook, the ECB increased the PEPP by €500bn.

For the week, the EUR slipped by 0.07% to $1.2112. In the week prior, the EUR had rallied by 1.32% to $1.2121.

For the European major indexes, it was a bearish week. The CAC40 slid by 1.81%, with the DAX30 and the EuroStoxx600 falling by 1.39 % and by 0.99% respectively.

For the Loonie

It was a quiet week on the economic data front. Ivey PMI numbers for November were the only stats for the markets to consider ahead of Wednesday’s BoC policy decision.

The PMI fell from 54.5 to 52.7 in November, weighing on the Loonie at the start of the week.

On Wednesday, the BoC left monetary policy unchanged, which was in line with market expectations.

The Bank of Canada pledged to keep rates unchanged until economic slack is absorbed so that the 2% inflation target is sustainably achieved. Based on October’s projections, this is not expected to happen until 2023.

With no plans to deliver further easing and progress towards a COVID-19 vaccine, the Loonie found support in the week.

In the week ending 11th December, the Loonie rose by 0.12% to C$1.2769. In the week prior, the Loonie had rallied by 1.58% to C$1.2784.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 11th December, the Aussie Dollar rallied by 1.45% to $0.7533, with the Kiwi Dollar rising by 0.51% to end the week at $0.7084.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included business and consumer confidence figures for November and December respectively.

The stats were skewed to the positive, with business confidence and consumer confidence on the rise.

Alongside progress towards a COVID-19 vaccine, the pickup in confidence drove demand for the Aussie Dollar.

For the Kiwi Dollar

It was a quiet week on the economic calendar.

Key stats included November electronic retail sales and Business PMI numbers.

It was a mixed bag. While retail sales rose by just 0.1%, the business PMI jumped from 51.7 to 55.3, reflecting improving economic conditions.

From elsewhere, economic data from China and progress towards a COVID-19 vaccine delivered support for the Kiwi Dollar in the week.

For the Japanese Yen

It was a relatively busy week on the economic calendar.

October household spending and finalized 3rd quarter GDP numbers were in focus in the 1st half of the week.

The stats were skewed to the positive, with spending rising by 2.1% in October following a 3.8% rise in September. Year-on-year, spending rose by 1.9%, following a 10.2% slump in September.

GDP numbers were also skewed to the positive. Year-on-year, the economy grew by 22.9%, revised up from a prelim 21.4%. Quarter-on-quarter, the economy expanded by 5%, which was in line with prelim.

BSI Large Manufacturing Conditions also impressed, rising from 0.1 to 21.6 in the 4th quarter.

While the stats were largely positive, COVID-19 vaccine news pegged the Yen back in the week.

The Japanese Yen rose by 0.12% to ¥104.04 against the U.S Dollar. In the week prior, the Yen had fallen by 0.08% to ¥104.17.

Out of China

It was a relatively busy week on the economic data front, with November trade and inflation figures in focus.

Exports jumped by 21.1% in November, following an 11.4% increase in October. Imports rose by a more modest 4.5%, following a 4.7% increase in October. As a result, the U.S Dollar trade surplus widened from $58.44bn to $75.42bn.

Inflation figures were on the disappointing side, however. Consumer prices fell by 0.5% in November, reversing a 0.5% increase in October. Month-on-month, consumer prices slid by 0.6%, following a 0.3% decline in October.

Wholesale deflationary pressures eased, however, with the producer price index falling by 1.5%. The producer price index had fallen by 2.1% in October.

In the week ending 11th December, the Chinese Yuan fell by 0.23% to CNY6.5463. In the week prior, the Yuan had risen by 0.71% to CNY6.5316.

The CSI300 slid by 3.48%, with the Hang Seng ended the week down by 1.23%.

British Online Supermarket Ocado Upgrades Annual Earnings Forecast; Target Price GBX 2,450

Ocado Group, the world’s largest online pure-player grocery supermarket, upgraded their annual earnings prediction for the second straight time in just two months, largely driven by a surge in demand for food delivery services amid the COVID-19 pandemic.

The British online supermarket expects EBITDA of more than 70 million pounds, up from a forecast of over 60 million pounds made last month. If realized, that would be a more than 60% surge in EBITDA from 2018-19’s 43.3 million pounds.

“With three new warehouses opening in 2021 which will ultimately give us 40% more capacity to our business, we look forward to being able to offer more slots to existing customers while welcoming new customers to Ocado and showing them what we can offer,” said Melanie Smith, Ocado Retail’s Chief Executive Officer.

At the time of writing, Ocado’s shares traded 3.23% lower at GBX 2250.77 on Thursday. However, the stock is up over 75% so far this year.

“Ocado Group’s (OCDO) Q4 sales confirmed strong UK gains but accelerated online market share losses. Another bump up in FY EBITDA expectations is entirely linked to the smooth redistribution of UK online slot demand across the week. As OCDO outlines in its outlook for 20/21, next year’s profit outlook will largely depend on a non-time delivery of additional capacity and a lack of reversal of this year’s consumer behaviour,” said James Grzinic, equity analyst at Jefferies.

Ocado Stock Price Forecast

Seven equity analysts forecast the average price in 12 months at 2,447.50p with a high forecast of 3,455.84p and a low forecast of 1,742.09p. The average price target represents a 10.87% increase from the last price of 2,207.51p. All those seven analysts, three rated “Buy”, four rated “Hold” and none “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of GBX 1,820 with a high of GBX 2,836 under a bull-case scenario and GBX 1,219 under the worst-case scenario. The firm currently has an “Equal-weight” rating on the online supermarket’s stock.

“We derive our price target from a DCF-based SOTP. We value the Retail business at c.508p. We value the remaining solutions business at c.944p, of which Kroger (477p). We include additional contract wins in our Base Case to the value of 300p. The remainder is cash and deferred consideration from M&S. Values are determined using DCFs (WACC 7.5%),” noted Maria-Laura Adurno, equity analyst at Morgan Stanley.

Several other analysts have also upgraded their stock outlook. Ocado Group had its price objective increased by Berenberg Bank to GBX 2,530 from GBX 2,430. The brokerage currently has a buy rating on the stock. Peel Hunt raised the target price to GBX 2,800 from GBX 2,490. Citigroup reiterated a buy rating and set a GBX 2,900 target price.

Analyst Comments

“We would expect the comment around the guidance upgrade to be taken positively by the market rather than focus on the fact that, sequentially, there has been a softening in basket size as well as Retail revenue growth. Online penetration in food retail is c.7.8% (pre-COVID-19 outbreak) in the UK and it is one of the most advanced markets. Ocado benefits from increasing penetration through its Retail and Solutions businesses,” Morgan Stanley’s Adurno added.

“Best-in-class tech suggests upside from additional capacity on existing contracts and new contracts. There is competition on the micro fulfilment side. Limited near-term catalysts, execution risk. Current valuation captures part of the upside (prospective contracts and acceleration in existing ones).”

Upside and Downside Risks

Risks to Upside: Ocado signs additional large international contracts, the greater scale from new contracts helps drive profitability for the whole group. With respect to existing contracts, partners ramp-up faster – highlighted by Morgan Stanley.

Risks to Downside: Execution risks as the company struggles to keep up with newly committed capacity, resulting in downsizing of existing contracts. The slow pace in getting new contracts, which are also smaller in size.

The Week Ahead – Capitol Hill, Brexit, and Vaccine updates and the FDA in Focus

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 54 stats are in focus in the week ending 11th December. In the week prior, 82 stats had also been in focus.

For the Dollar:

It’s a relatively busy week ahead on the economic data front.

3rd quarter nonfarm productivity, unit labor costs, and October JOLTs job openings are in focus.

Barring marked revisions from prelim numbers, the JOLTs job openings will have the greatest impact. Weak numbers will raise yet more flags, as concerns over the labor market recovery linger.

On Thursday, the focus shifts to November inflation and weekly jobless claims figures. Expect the jobless claims to have the greatest impact.

November wholesale inflation and prelim consumer sentiment figures for December wrap things up on Friday.

Away from the economic calendar, the markets will be monitoring COVID-19 news updates and chatter from Capitol Hill.

The Dollar could take a double hit should the FDA approve Pfizer Inc.’s vaccine and lawmakers make progress in stimulus talks.

The Dollar Spot Index ended the week down by 1.19% to 90.701.

For the EUR:

It’s a busy week ahead on the economic data front.

In the 1st half of the week, the German economy is in the spotlight.

October industrial production and trade figures and ZEW Economic Sentiment numbers for December are due out.

Market sensitivity to the numbers will largely depend on COVID-19 vaccine news updates.

The focus will then shift to the ECB monetary policy decision on Thursday. Lagarde had assured of further support in recent weeks. An increase to its bond purchasing program is expected, whether there will be further moves remains to be seen.

Fresh economic projections will also provide the markets with a guide of what to expect going into 2021.

Other stats in the week will likely have a muted impact on the EUR and the European equity markets. These stats include finalized Eurozone GDP and economic sentiment figures and finalized inflation figures for Germany and Spain.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week. Expect Brexit to also influence…

The EUR ended the week up by 1.32% to $1.2121.

For the Pound:

It’s a busier week ahead on the economic calendar.

In the 1st half of the week, house price and retail sales figures are due out on Monday and Tuesday. Expect November’s BRC Retail Sales figures to draw the greatest interest.

With a lack of stats mid-week, the focus will then shift to a busy Thursday.

Key stats include trade data, industrial and manufacturing production figures for October, and GDP numbers.

Expect the manufacturing production and GDP numbers to have the greatest impact on the day.

Away from the economic calendar, Brexit and COVID-19 will remain the key drivers in the week.

The Pound ended the week up by 0.98% to $1.3441.

For the Loonie:

It’s a quiet but important week ahead on the economic calendar.

On the economic data front, November’s Ivey PMI, due out on Monday, is the only stat to consider.

Any significant decline would test support for the Loonie.

On Wednesday, however, the BoC is in action. The markets are expecting the BoC to stand pat. Progress towards a COVID-19 vaccine has supported riskier assets and crude oil prices.

Hopes of an economic rebound going into 2021 will likely allow the BoC to stand pat.

Away from the calendar, COVID-19 vaccine news, stimulus talk from Capitol Hill, and stats from China will also influence.

The Loonie ended the week up by 1.58% to C$1.2784 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead on the economic calendar.

Business and Consumer confidence figures due out on Tuesday and Wednesday will provide direction.

From elsewhere, trade data from China will also influence.

Away from the economic calendar, COVID-19 news will continue to influence. U.S politics could also play a role should lawmakers make progress towards a stimulus package.

The Aussie Dollar ended the week up by 0.51% to $0.7425.

For the Kiwi Dollar:

It’s a relatively quiet week ahead on the economic calendar.

Electronic card retail sales and Business PMI numbers for November are due out in the week.

While the stats will influence, trade data from China and COVID-19 news updates will likely remain key drivers.

The Kiwi Dollar ended the week up by 0.30% to $0.7048.

For the Japanese Yen:

It is a relatively busy week on the economic calendar.

Household spending and current account figures for October and finalized 3rd quarter GDP numbers are due out on Tuesday.

Barring marked revisions to the GDP numbers, household spending will garner the greatest interest.

At the end of the week, the BSI Large Manufacturing Conditions Index for the 4th quarter will also draw attention.

Over the course of the week, however, COVID-19 vaccine news will likely mute the impact of any weak data.

The Japanese Yen ended the week down by 0.08% to ¥104.17 against the U.S Dollar.

Out of China

It’s another relatively busy week ahead on the economic data front.

On Tuesday, November trade figures will draw plenty of interest ahead of inflation figures on Wednesday.

Biden’s plans to retain the phase 1 trade agreement with China will increase the focus on the trade data.

The Chinese Yuan ended the week up by 0.71% to CNY6.5316 against the U.S Dollar.

Geo-Politics

U.S Politics

At the end of last week, talks of progress towards a COVID-19 stimulus package supported riskier assets.

Progress will need to be made in the week ahead, however, to prevent a pullback following last week’s payroll figures.

In the week ahead, the FDA is also in focus. Reviews of BioNTech/Pfizer Inc. and Moderna Inc.’s vaccines are scheduled.

While approvals are expected, production numbers and delivery timelines will be key.

Brexit

For the Pound and the UK economy, Brexit remains the key driver, as talks resumed last week. Going into this weekend, EU negotiators talked of progress being made. In contrast, however, Britain’s negotiators talked of issues remaining.

Updates from this weekend will have a material impact on the Pound as the markets eye this coming week’s EU Summit.

The Weekly Wrap – COVID-19 Vaccine and Brexit Updates and Economic Data were in Focus

The Stats

It was a particularly busy week on the economic calendar, in the week ending 4th December.

A total of 82 stats were monitored, following 50 stats from the week prior.

Of the 82 stats, 49 came in ahead of forecasts, with 29 economic indicators came up short of forecasts. 4 stats were in line with forecasts in the week.

Looking at the numbers, 47 of the stats reflected an upward trend from previous figures. Of the remaining 35 stats, 29 reflected a deterioration from previous.

For the Greenback, it was a 3rd consecutive week in the red. The Dollar Spot Index slid by 1.19% to 90.701. In the week prior, the Dollar had fallen by 0.66% to 91.785.

Progress towards a COVID-19 vaccine continued in the week, with the UK’s MHRA being the first to approve a COVID-19 vaccine to spur demand for riskier assets.

Out of the U.S

It was a busy week on the economic data front.

In the 1st half of the week, ISM Manufacturing PMI and ADP Nonfarm Employment Change figures were in focus.

The stats were skewed to the negative. Manufacturing sector growth slowed in November, with an increase in payrolls coming up short of expectations.

In the 2nd half of the week, service sector activity and labor market conditions remained in focus.

Initial jobless claims eased back from 778k to 712k in the week ending 27th November.

Service sector growth slowed in November, however, with the ISM Services PMI falling from 56.6 to 55.9.

Wrapping things up were the all-important nonfarm payroll figures and U.S unemployment rate.

A 245k increase in nonfarm payrolls led to a slip in the unemployment rate from 6.9% to 6.5%. The markets had anticipated a 469k jump in nonfarm payrolls, however.

In the equity markets, the NASDAQ rose by 2.12%, while the Dow and S&P500 gaining 1.03% and 1.67% respectively.

Out of the UK

It was a relatively quiet week on the economic data front.

Finalized private sector PMI and construction PMI numbers for November were in focus.

The stats had a muted impact on the Pound, however. For the Pound, Brexit updates remained the key driver in the week, with Barnier in London attempting to find a way forward.

Hopes of an agreement continued to drive support, leading to a move through to $1.34 levels. Uncertainty going into the weekend remained, however, preventing a breakout.

In the week, the Pound rose by 0.98% to $1.3441. In the week prior, the Pound had risen by 0.27% to $1.3311.

The FTSE100 ended the week up by 2.87%, following on from a 0.25% gain in the previous week.

Out of the Eurozone

It was a particularly busy week on the economic data front.

Private sector PMIs for Italy and Spain and finalized PMIs for France, Germany, and the Eurozone were headline stats.

There were few surprises, with private sector activity taking a hit as a result of the 2nd wave of the COVID-19 pandemic.

The Eurozone Composite fell from 50.0 to 45.3 in November, with service sector activity doing the damage.

Other stats included unemployment, retail sales, and factory order figures out of Germany that impressed.

Deflationary pressures were on the rise, however, supporting an ECB move next week.

Ultimately, it was progress towards a COVID-19 vaccine, however, that muted the effect of weak economic data.

For the week, the EUR rallied by 1.32% to $1.2121. In the week prior, the EUR had risen by 0.89% to $1.1963.

For the European major indexes, it was a mixed week. The CAC40 and EuroStoxx600 rose by 0.20% and by 0.21% respectively, while the DAX30 fell by 0.28%.

For the Loonie

It was a relatively busy week on the economic data front, ahead of next week’s BoC monetary policy decision.

Key stats included 3rd quarter GDP, October trade, and November employment figures.

The stats were mixed in the week. The Canadian economy failed to rebound from the 2nd quarter meltdown, contracting by 5.16%, year-on-year.

Trade and employment figures at the end of the week were skewed to the positive, however. While the trade deficit narrowed marginally, employment rose by a further 62.1K, bringing the unemployment rate down from 8.9% to 8.5%.

With economic data Loonie positive, COVID-19 vaccine news also delivered support for riskier assets in the week.

In the week ending 4th December, the Loonie rallied by 1.58% to C$1.2784. In the week prior, the Loonie had risen by 0.81% to C$1.2989.

Elsewhere

It was a relatively bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 4th December, the Aussie Dollar rose by 0.51% to $0.7425, with the Kiwi Dollar gaining 0.30% to end the week at $0.7077.

For the Aussie Dollar

It was a relatively busy week on the economic calendar.

Key stats included company gross profit and manufacturing figures on the 1st half of the week.

The stats were skewed to the negative. Company gross operating profits came up short of forecasts, with manufacturing sector activity seeing slower growth.

Stats in the 2nd half of the week, however, were more material with 3rd quarter GDP, trade, and retail sales in focus.

By contrast, the stats were skewed to the positive, delivering Aussie Dollar support.

While the trade surplus widened, retail sales figures at the end of the week were key. In October, retail sales rose by 1.4%, according to finalized figures, falling short of a prelim 1.5% rise. In September sales had fallen by 1.1%. The jump was attributed to Victoria State’s reopening.

For the Kiwi Dollar

It was a quiet week on the economic calendar.

Key stats included November business confidence and October building consent figures. The stats were skewed to the positive, delivering Kiwi Dollar support.

While the stats were positive, impressive PMI numbers out of China and COVID-19 vaccine news were the key drivers.

For the Japanese Yen

It was a busier week on the economic calendar.

October retail sales and prelim industrial production figures were in focus at the start of the week.

The numbers were upbeat, with retail sales jumping by an unexpected 6.4%.

Industrial production also continued to rise, reflecting a pickup in demand at the turn of the quarter.

In the week, finalized private sector PMIs came in ahead of prelim figures. The impact on the Yen was muted, however, with both the services and manufacturing sectors contracting in October.

Improved market risk appetite weighed on the Yen in the week, with COVID-19 vaccine news supporting riskier assets.

The Japanese Yen fell by 0.08% to ¥104.17 against the U.S Dollar. In the week prior, the Yen had fallen by 0.22% to ¥104.09.

Out of China

It was a relatively busy week on the economic data front, with November private sector PMI figures in focus.

Both the NBS and Caixin PMIs for the services and manufacturing sectors rose in November.

The all-important Caixin Manufacturing PMI increased from 53.6 to 54.9 in November.

While the stats delivered support, Biden’s plan to keep the phase 1 trade agreement was negative.

In the week ending 4th December, the Chinese Yuan rose by 0.71% to CNY6.5316. In the week prior, the Yuan had fallen by 0.23% to CNY6.5781.

The CSI300 rose by 1.71%, while the Hang Seng ended the week down by 0.22%.

COVID-19 Vaccine Update – The UK Wastes No Time as MHRA Approves Vaccine

The Latest

BioNTech and Pfizer Inc. became the first pharma to have their mRNA COVID-19 vaccine approved on Wednesday.

The UK’s Medical & Healthcare Products Regulatory Agency (“MHRA”) became the first agency to approve a COVID-19 vaccine.

With the UK suffering at the hands of the COVID-19 pandemic, the independent regulator wasted little time.

The UK Government has pre-ordered 145 million doses of COVID-19 vaccines from Pfizer Inc., Moderna Inc., and AstraZeneca. Of the 145 million doses, the government has pre-ordered 40 million from BioNTech/Pfizer Inc.

With an efficacy rate of 95% and effective across all age groups, the first doses of the vaccine are due to arrive in days.

The UK Government announced that a first batch of 800,000 doses forms part of an expected 10 million doses by the end of the year.

With the vaccine coming in 2 doses, 5 million patients will receive inoculation if BioNTech/Pfizer Inc. delivers the full quota.

The Government’s Joint Committee on Vaccination and Immunisation (“JCVI”) affirmed on Wednesday that the first priorities should be the prevention of COVID-19 mortality and the protection of health and social care staff and systems.

The JVIC has given older adult residents in care homes the highest priority for vaccination, followed by care home workers.

Secondary priorities could include vaccination of those at increased risk of hospitalization and at an increased risk of exposure.

Logistics will now need to be in place to transport the vaccine, at -70C, for administration across the UK.

How the Markets Reacted

The FTSE100 rose by 1.23% on Wednesday, with the upside coming off the back of the MHRA announcement.

For the European majors, while it was a mixed day, the DAX30 and CAC40 came off lows in response to the news.

BioNTech SE share price rose by 6.21% in response to the news. Pfizer Inc. ended the day up by a more modest 3.51%.

While trailing Pfizer Inc. in the race to deliver a global vaccine, there was also support for AstraZeneca and Moderna Inc., which rose by 1.26% and by 1.41% respectively.

What’s next?

With UK regulators beating the FDA and the EU’s European Medicines Agency (“EMA”) to the punch, BioNTech/Pfizer Inc. will now need to deliver the doses.

There’s no trial run for BioNTech/Pfizer Inc. in terms of delivering the doses in a timely manner.

Both BioNTech/Pfizer Inc. and the government will likely face logistical challenges and the markets and governments from overseas will likely watch closely.

Successful distribution and administration of the first batch are now key. For the FDA and the EMA, both will have the benefit of the UK government’s experiences in distribution and vaccination.

The FDA is set to review the BioNTech/Pfizer Inc. vaccine on 10th December. In the New Year, the EMA review is due on 12th January.

Key areas of focus in the coming weeks will be production and distribution and geographical allocation.

The EU has pre-ordered 300 million doses of the BioNTech/Pfizer Inc. vaccine, with the U.S pre-ordering 100 million and an option for an additional 500 million doses.

BioNTech/Pfizer Inc. has projected between 5 million to 50 million doses to be available by the end of the year.

The UK is due to receive 10 million doses, which leaves 40 million assuming that 50 million doses are produced.

With the EU review of the vaccine not due until mid-January, that leaves the U.S and Japan in focus. While the U.S has pre-ordered 100 million, Japan has pre-ordered 120 million of the BioNTech/Pfizer Inc. vaccine.

Pressure may mount on the likes of the EMA to bring forward vaccine reviews. BioNTech/Pfizer Inc. may also feel increased pressure to deliver on the higher side of production forecasts…

The Week Ahead – Economic Data, COVID-19 Vaccine Updates, and Brexit in Focus

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 88 stats in focus in the week ending 4th December. In the week prior, 50 stats had been in focus.

For the Dollar:

It’s a busy week ahead on the economic data front.

In the 1st half of the week, the market’s preferred ISM Manufacturing PMI and ADP Nonfarm Employment Change figures are due out.

With plenty of focus on labor market conditions, the ADP figures could overshadow the ISM numbers.

On Thursday, however, both the initial jobless claims and the ISM Non-Manufacturing PMIs will draw plenty of attention.

At the end of the week, nonfarm payrolls and November’s unemployment rate will provide riskier assets with direction.

Weak numbers could force the FED into action should lawmakers continue to grapple over a stimulus package.

Away from the economic calendar, COVID-19 and U.S politics will continue to remain the key drivers, however.

The Dollar Spot Index ended the week down by 0.65% to 91.790.

For the EUR:

It’s a busy week ahead on the economic data front.

Private sector PMIs for Spain and Italy and finalized PMIs for France, Germany, and the Eurozone are due out.

On Tuesday, German unemployment figures will also be in focus alongside the manufacturing numbers.

Mid-week, German retail sales figures are due out ahead of German factory order numbers on Friday.

Other stats in the week include prelim November inflation and Eurozone unemployment and retail sales figures.

These numbers are unlikely to have a muted impact on the EUR, however.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week. Expect Brexit to also influence…

The EUR ended the week up by 0.89% to $1.1963.

For the Pound:

It’s another relatively quiet week ahead on the economic calendar.

Finalized private sector PMIs are due out on Tuesday and Thursday, with November’s construction PMI on Friday.

Barring any downward revisions, however, the stats are likely to have a muted impact on the Pound.

Sentiment towards Brexit and COVID-19 will remain the key drivers in the week.

The Pound ended the week up by 0.27% to $1.3311.

For the Loonie:

It’s a particularly busy week ahead on the economic calendar.

In the 1st half of the week, 3rd quarter and October GDP and RMPI numbers are in focus. Expect the GDP numbers to have the greatest impact.

The focus will then shift to trade and employment figures due out on Friday. Expect the employment numbers to have the greatest impact at the end of the week.

From elsewhere, private sector PMIs numbers from China, the Eurozone, and the U.S will also provide direction.

Away from the calendar, COVID-19 vaccine news and stimulus talk from Capitol Hill will also influence.

The Loonie ended the week up by 0.81% to C$1.2989 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively busy week ahead on the economic calendar.

AIG manufacturing index figures are due out ahead of 3rd quarter GDP numbers on Wednesday.

The focus will then shift to trade data and retail sales figures due out on Thursday and Friday.

On the monetary policy front, the RBA policy decision on Tuesday will also draw plenty of attention. While the markets are expected rates to be left unchanged, there could be the talk of further support via its bond-buying program.

From elsewhere, private sector PMI numbers from China will also influence.

Away from the economic calendar, COVID-19 news will continue to provide direction. U.S politics could also play a role should lawmakers make progress towards a stimulus package.

The Aussie Dollar ended the week up by 1.16% to $0.7387.

For the Kiwi Dollar:

It’s a relatively quiet week ahead on the economic calendar.

November business confidence figures at the start of the week will draw interest. With the RBNZ assuring continued support disappointing numbers would test Kiwi Dollar support.

Late in the week, building consent figures for October would likely have a muted impact on the Kiwi.

From elsewhere, private sector PMI numbers from China will also provide direction in the week ahead.

The Kiwi Dollar ended the week up by 1.41% to $0.7027.

For the Japanese Yen:

It is a relatively quiet week on the economic calendar.

October industrial production and retail sales figures are due out on Monday. Both sets of numbers will be of interest, though the impact on the Yen will likely be limited.

The focus will then shift to finalized manufacturing and services PMIs are due out on Tuesday and Thursday.

Barring marked deviation from prelim figures, however, the markets will likely brush aside the numbers.

From elsewhere, economic data from China will influence.

Away from the economic calendar, any further positive updates on COVID-19 vaccines would likely ease demand for the Yen.

The Japanese Yen ended the week down by 0.22% to ¥104.09 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

Private sector PMI numbers for November are due out in the week. The market’s preferred Caixin Manufacturing PMI on Tuesday will likely have the greatest impact.

Economic data from China has continued to impress. Any disappointing numbers would test market risk appetite early in the week.

The Chinese Yuan ended the week down by 0.23% to CNY6.55781 against the U.S Dollar.

Geo-Politics

U.S Politics

Following last week’s Thanksgiving holidays, the markets will look towards Capitol Hill. There will be two areas of focus. Firstly, any government interventions to curb the spread of the COVID-19 pandemic and, secondly, stimulus talks.

A failure to make progress on stimulus and reintroduction of lockdown measures would be the worst-case scenario for riskier assets.

Brexit

For the Pound and the UK economy, Brexit remains a key driver. Talks resumed on the weekend and time is rapidly running out.

With U.S President-Elect Biden also getting involved, the markets are hoping for an imminent deal.

The Weekly Wrap – COVID-19 Vaccine News Supported Riskier Assets in the Week

The Stats

It was a quieter week on the economic calendar, in the week ending 27th November.

A total of 50 stats were monitored, following 62 stats from the week prior.

Of the 50 stats, 25 came in ahead of forecasts, while 21 economic indicators came up short of forecasts. 4 stats were in line with forecasts in the week.

Looking at the numbers, 16 of the stats reflected an upward trend from previous figures. Of the remaining 35 stats, 31 reflected a deterioration from previous.

For the Greenback, it was a 2nd consecutive week in the red. The Dollar Spot Index fell by 0.65% to 91.790. In the week prior, the Dollar had fallen by 0.39% to 92.392.

Hopes of a COVID-19 vaccine before the end of the year provided riskier assets with support in the week. Softer demand for the Greenback came in spite of disappointing economic data from the U.S and the continued rise in new COVID-19 cases.

Out of the U.S

It was a busy week on the economic data front.

In the 1st half of the week, prelim private sector PMI numbers for November impressed. The all-important services PMI rose from 56.9 to 57.7, with the manufacturing PMI climbing from 53.4 to 56.7.

Consumer sentiment waned in November, however, with the CB Consumer Confidence Index falling from 101.4 to 96.1. This was to be expected, with the latest spike in new COVID-19 cases and dire labor market conditions.

Mid-week, the weekly jobless claims, core durable goods orders, 3rd quarter GDP, and personal spending figures were in focus.

The stats were mixed. Initial jobless claims rose from 742k to 778k in the week ending 20th November. The latest figure further confirmed that the labor market recovery had stalled.

Core durable goods orders impressed with a 1.3% rise in October, with personal spending rising by 0.5% to come in ahead of forecasts. Spending was down from a 1.2% rise in September, however.

2nd estimate GDP numbers for the 3rd quarter were in line with 1st estimates, which came up short of a forecasted upward revision.

Other stats ahead of the Thanksgiving holidays included finalized consumer sentiment and inflation figures.

The Michigan Consumer Sentiment Index came in at 76.9, down from a prelim 77.0. Of greater significance was softer inflationary pressures in October. The annual rate of inflation eased from 1.6% to 1.4%.

On the monetary policy front, the FOMC meeting minutes had a muted impact. The FED focus on the COVID-19 pandemic was somewhat dated following the latest COVID-19 vaccine updates.

In the equity markets, the NASDAQ rose by 2.96%, while the Dow and S&P500 gaining 2.21% and 2.27% respectively.

Out of the UK

It was a relatively quiet week on the economic data front.

Prelim private sector PMI numbers for November were in focus at the start of the week.

It was a mixed bag, with manufacturing sector activity seeing a pickup, while the services sector contracted.

The all-important services PMI slid from 52.3 to 45.8 as lockdown measures hit the sector.

Away from the economic calendar, the Pound did find some support on hopes of an imminent Brexit deal, however.

In the week, the Pound rose by 0.27% to $1.3311. In the week prior, the Pound had risen by 0.65% to $1.3275

The FTSE100 ended the week up by 0.25%, following on from a 0.56% gain in the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Prelim private sector PMIs for France, Germany, and the Eurozone were in focus at the start of the week.

With lockdown measures in place, the services sector took a hit, with the Eurozone Services PMI falling from 46.9 to 41.3.

Eurozone manufacturing sector activity eased as a result of a contraction in France, while Germany continued to report solid growth in the sector.

On Tuesday, the focus shifted to Germany. Finalized 3rd quarter GDP and November’s IFO Business Climate figures were in focus.

While an upward revision to 3rd quarter GDP numbers was positive, a slide in business sentiment disappointed. The Ifo Business Climate Index fell from 92.5 to 90.7.

The markets were expecting a deterioration in sentiment, however, which limited the impact on the EUR.

In the 2nd half of the week, Germany’s GfK Consumer Climate indicator reflected consumer sentiment towards the COVID-19 pandemic. A reintroduction of containment measures dragged the headline indicator down from -3.2 to -6.7.

From France, finalized 3rd quarter GDP, October consumer spending, and prelim inflation figures for November were in focus on Friday.

Consumer spending and inflation were the main areas of focus, with the markets less interested in 3rd quarter numbers in spite of an upward revision to 18.7%.

The stats were skewed to the positive, with consumer spending jumping by 3.7%, following a 4.4% slide in September.

Consumer prices were also on the rise. In November, consumer prices rose by 0.2%. Prices had been flat in October.

From the ECB, November’s financial stability review and monetary policy meeting minutes delivered a grim view. There was EUR resilience, however, coming from progress towards a COVID-19 vaccine.

For the week, the EUR rose by 0.89% to $1.1963. In the week prior, the EUR had risen by 0.19% to $1.1857.

For the European major indexes, it was another bullish week. The CAC40 rose by 1.86%, with the DAX30 and EuroStoxx600 gaining 1.51% and 0.93% respectively.

For the Loonie

It was a particularly quiet week on the economic data front.

There were no material stats to provide direction. The lack of stats left the Loonie in the hands of COVID-19 news updates and crude oil inventory numbers.

In the week ending 27th November, the Loonie rose by 0.81% to C$1.2989. In the week prior, the Loonie had risen by 0.32% to C$1.3095.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 27th November, the Aussie Dollar rose by 1.16% to $0.7387, with the Kiwi Dollar rallying by 1.41% to end the week at $0.7027.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included 3rd quarter construction work down and new capital expenditure figures.

The stats were skewed to the negative, with both taking a larger hit than expected in the quarter.

While the stats were disappointing, hopes of a COVID-19 vaccine by the end of the year delivered support.

For the Kiwi Dollar

It was a busier week on the economic calendar.

3rd quarter retail sales and October trade figures were in focus, with both sets of numbers beating forecasts.

Retail sales surged by 28%, reversing a 14.6% slide from the 2nd quarter, with the annual trade deficit widening to a 28-year high NZ$2,190m.

From the RBNZ, November’s Financial Stability report also delivered support to the Kiwi Dollar, while risks remained tilted to the downside.

For the Japanese Yen

It was a quiet week on the economic calendar.

November inflation figures at the end of the week failed to move the dial. A pickup in deflationary pressures was aligned with the market outlook. Tokyo’s core consumer prices fell by 0.7%, following a 0.5% decline in October.

While the inflation figures disappointed, updates on the COVID-19 vaccine eased demand for the Yen.

The Japanese Yen fell by 0.22% to ¥104.09 against the U.S Dollar. In the week prior, the Yen had risen by 0.74% to ¥103.86.

Out of China

It was a particularly quiet week on the economic data front.

There were no material stats to provide the Yuan with direction in the week.

In the week ending 27th November, the Chinese Yuan fell by 0.23% to CNY6.5781. The Yuan had risen by 0.66% to CNY6.5630 in the week prior.

The CSI300 rose by 0.76%, with the Hang Seng ended the week up by 1.68%.

Buyers Struggle to Keep Indices Higher

Indices started European session relatively high but buyers failed to hold prices in the bullish territory.

DAX creates a false bullish breakout pattern.

SP500 corrects the bullish breakout from the symmetric triangle.

FTSE with a potentially dangerous triple top formation.

Oil pushing higher but chances for a correction are rising.

Gold stays below crucial resistance on the 1850 USD/oz.

Dollar Index fights on important mid-term support.

AUDUSD defends upper line of the ascending triangle.

EURUSD defends 1.19.

For a look at all of today’s economic events, check out our economic calendar.