Has the market finally started to turn its attention back towards the virus after the US election, and news from Pfizer (NYSE:) hogged the newsreels? In the US, the number of hospitalized COVID patients reached 65,368 yesterday, surpassing Tuesday’s record for the most hospitalizations since April, according to the COVID Tracking Project. Yesterday New York issued new restrictions for most bars and restaurants as well as limiting the number of people of private residence gatherings.
I think it is hard to say that with any certainty, but It could be a factor in this morning’s London session weakness in equities, although it is worth considering that the has risen 14% in the last 10 sessions, so perhaps some profit-taking is overdue.
Still, it’s questionable whether this will matter next week, considering the vaccine’s tailwinds are likely to continue to dominate financial markets. But for today, as the market debates whether hedge funds have had enough of the rotation theme. Investors are reacting fairly negatively to the latest COVID headline uglies.
But at least for today so far the nexus of stalling stock markets and COVID headline uglies typically make for bad bedfellows.
The other thing to note is investors aren’t exactly piling back into fixed income in any great size at the moment.
OPEC officials have suggested that current production cuts may be extended 3-6 months when the group meets at the end of November in response to recent macro developments. The OPEC+ cuts are still driving global inventory draws but a demand stalled environment caused by a surge in coronavirus infections in the US and Europe means it is prudent for an even more gradual easing in 2021. And possibly a willingness to offer up deeper cuts as we head into an unvaccinated winter of COVID gloom
Hard To Consider EUR/USD Longs Before 1.1675
There was good buying across G10 yesterday; it felt like a continuation of USD short covering. Stocks and risk sentiment, in general, feels a bit tired after the boost earlier in the week on positive covid vaccine news. has been one of the preferred instruments to express bearish USD view since the US election, so that might be where there is the most wood to chop no, it’s challenging to consider re-engaging longs before 1.1675-1.1700
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