· Dollar stuck near support, NZ$ strikes two-year high
The U.S. dollar eased on Monday as the prospect of an early rollout of coronavirus vaccines offset concerns about economic restrictions to control the spread of the virus, favouring risk assets for the moment.
A holiday in Japan kept most majors contained, though the New Zealand dollar stormed to a two-year top of $0.6962 as super-strong retail sales data quashed the risk of further policy easing and left yields attractively high. [AUD/]
The euro edged up to $1.1872, having repeatedly failed to break above $1.1893 resistance last week. It needs to clear the November top of $1.1919 to extend its uptrend.
Analysts at Capital Economics are bullish on the single currency’s longer-term outlook.
“We think that the exchange rate will rise further over the next few years against a backdrop of lower euro-zone stability risks; an increased real yield gap between the euro-zone and the U.S.; and a continued recovery in the global economy,” they wrote in a note.
They lifted their forecasts for the euro and now see it at $1.2500 by the end of 2021 and $1.3000 at the close of 2022, up from $1.2000 and $1.2500 previously.
The dollar has also been drifting slowly lower on the Japanese yen and last stood at 103.74, just above chart support at 103.62. A break there would see a re-test of the November trough of 103.16, which was the lowest since the market turmoil of March.
Against a basket of currencies, the dollar was a shade softer at 92.266 and again uncomfortably close to support at 92.129 and 91.373.
Promising news on vaccines have been weighing on the safe-haven dollar. The first people in the United States could receive a COVID-19 vaccine a day after the U.S. Food and Drug Administration grants approval in mid-December.
And Britain could give regulatory approval to Pfizer-BioNTech’s COVID-19 vaccine this week.
· Trump campaign appeals Pennsylvania election defeat
U.S. President Donald Trump’s campaign on Sunday appealed part of a ruling that clears the way for the battleground state of Pennsylvania to certify Democratic President-elect Joe Biden as the winner of the Nov. 3 election.
· Biden expected to name Linda Thomas-Greenfield U.N. ambassador: reports
· Blinken is president-elect's pick as secretary of state: Biden ally
Joe Biden will pick Antony Blinken as U.S. secretary of state, a person close to the president-elect’s transition said on Sunday, elevating one of his most seasoned and trusted aides as he prepares to undo President Donald Trump’s foreign policy.
· Biden push to restore U.S. global role starts with Blinken
President-elect Joe Biden is moving forward on his campaign pledge to restore America as a leader on the global stage and lean on experts, tapping veteran diplomats for key posts even as President Donald Trump continues to refuse to concede.
· As Biden marches forward with Cabinet, Trump hopes likely to fade in key states
U.S. President Donald Trump’s increasingly tenuous efforts to reverse his election loss to President-elect Joe Biden could be dealt a lethal blow on Monday, as Biden turns to the task of building his cabinet.
· Job loss fears amid lockdowns will hit holiday shopping sales, market researcher Jim Bianco warns
Wall Street forecaster James Bianco warns the new economic lockdowns will hurt the holiday rush and retail.
According to Bianco, the fallout from surging coronavirus infections is starting to put consumers on alert due to job market uncertainty — particularly for those who can’t work from home.
CORONAVIRUS UPDATES:
Global cases: 59.03M
Global deaths: 1.39M
U.S. case: 12.58M
India case: 9.14M
Brazil cases: 6.07M
Russia cases: 2.11M
· Global dividends forecast to inch back from coronavirus cliff edge
Dividend payouts by the world’s biggest firms in 2020 will fall by 17.5%-20%, equivalent to some $263 billion, as a result of the coronavirus crisis, a report on Monday forecast, but could rebound strongly next year.
· COVID-19 shots could reach first Americans by mid-December, top health official says
U.S. healthcare workers and others recommended for the nation’s first COVID-19 inoculations could start getting shots within a day or two of regulatory consent next month, a top official of the government’s vaccine development effort said on Sunday.
· Oxford-AstraZeneca Covid vaccine is 70% effective, trial shows
British pharmaceutical giant AstraZeneca on Monday said an interim analysis of clinical trials showed its coronavirus vaccine has an average efficacy of 70% in protecting against the virus.
· New central London office construction falls 50% in six months: Deloitte
The amount of new space under construction plunged to 2.6 million square feet, taking volumes back to their historical averages after a pre-pandemic boom, Deloitte Real Estate’s London Office Crane Survey showed.
· ECB emergency bond purchases to last while disruptions persist: Lane
The European Central Bank will continue its emergency bond purchases as long as the coronavirus pandemic continues to disrupt normal economic activity, ECB chief economist Philip Lane told French newspaper Les Echos in an interview.
The ECB earlier said the emergency purchase would last until least June 30 but already signalled that it would “recalibrate” this programme at the December meeting, a message taken to mean that the purchases would be expanded and extended.
· Euro zone business activity shrinks to six month low after new coronavirus lockdowns
Economic activity in the euro zone sank once again in November after governments introduced new lockdowns and social restrictions to contain further spreading of the coronavirus.
However, news that a Covid-19 vaccine might soon be ready for distribution has made businesses more confident about returning to their normal activity levels in the next 12 months.
The flash euro zone PMI composite output index, which looks at activity in both manufacturing and services sectors, came in at 45.1 in November — the lowest reading in six months.
· Germany may start COVID-19 vaccine programme in December: health minister
Germany could start administering shots of COVID-19 vaccines as soon as next month, Health Minister Jens Spahn was quoted as saying.
“There is reason to be optimistic that there will be approval for a vaccine in Europe this year,” Spahn said in an interview with publishing group RedaktionsNetzwerk Deutschland. “And then we can start right away.”
· 'Painful' downgrades will raise South Africa's borrowing costs, minister says
South Africa’s finance ministry said on Saturday credit ratings downgrades by Moody’s and Fitch would increase the country’s borrowing costs and constrain its fiscal options.
Credit rating agencies Fitch and Moody’s lowered South Africa’s sovereign ratings deeper into junk territory late on Friday on rising debt and a likely further weakening in its fiscal position. S&P Global affirmed its rating.
At last month’s mid-term budget, the National Treasury forecast South Africa would record a budget deficit of over 15% of GDP in the fiscal year ending March 2021, the highest in post-apartheid history.
Africa’s most industrialised nation currently has a debt of nearly 4 trillion rand ($260 billion), or 63.3% of the GDP. Its debt-to-GDP ratio is expected to swell to over 90% in three years, the worst such increase in the world.
· China says it will respond to U.S. admiral visit to Taiwan
China will respond to the reported visit of a U.S. Navy admiral to Taiwan and firmly opposes any military relations between Taipei and Washington, China’s Foreign Ministry said on Monday.
A two-star Navy admiral overseeing U.S. military intelligence in the Asia-Pacific region has made an unannounced visit to Taiwan, two sources told Reuters on Sunday. Neither Taiwan nor the United States has officially confirmed the trip.
The Trump administration has ramped up support for Taiwan, including with new arms sales, alarming China, which views the democratic island as one of its provinces with no right to state-to-state ties.
· New regional trade deals to help China ‘sustain its advantages’ in global supply chains
China is set to remain a key player in global supply chains, thanks to a combination of factors ranging from the coronavirus pandemic to new trade agreements.
China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP) this month, forming the largest trade pact in the world.
· Trump administration drafts list of 89 Chinese firms with alleged military ties: Reuters, citing document
The Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of U.S. goods and technology, according to a draft copy of the list seen by Reuters.
The list, if published, could further escalate trade tensions with Beijing and hurt U.S. companies that sell civil aviation parts and components to China, among other industries.
· Hong Kong, Singapore bubble delay highlights hurdles to travel recovery
A delay to Asia’s first travel bubble between Hong Kong and Singapore has hit the shares of their flag carriers and highlighted the challenges facing the global travel industry as it tries to rebound from the pandemic.
· Philippine central bank governor says rate cuts so far are ‘more than enough’ to support economy through 2021
· Oil prices extend gains on COVID vaccine hopes, OPEC+
Oil prices extended gains on Monday as traders eyed a recovery in crude demand thanks to successful coronavirus vaccine trials, although prices were contained by renewed lockdowns in several countries.
Sentiment was also bolstered by hopes that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, will keep crude output in check.
Brent crude futures rose 21 cents, or 0.5%, to $45.17 a barrel by 0436 GMT while U.S. West Texas Intermediate crude gained 10 cents, or 0.2%, to $42.52 a barrel. Both benchmarks jumped 5% last week.
Reference: CNBC, Reuters, Worldometers
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