DXY firmed last night:
Which flamed out the Australian dollar breakout again:
Gold and oil were strong anyway:
Metals were mixed:
Miners eased:
Junk is on fire:
Treasuries were bid:
Stocks hit new all time highs:
Westpac has the wrap:
Event Wrap
Senate Majority Leader McConnell, who has not yet endorsed the $908 billion bipartisan proposal, will today speak with Treasury Secretary Mnuchin and White House Chief of Staff Meadows about Covid-19 relief.
US NFIB small business survey slipped to pre-pandemic levels at 101.4 (est. 103.5, prior 104.0), optimism for an improved economy in 2021 waning but employment components firming.
The European ZEW sentiment survey showed that expectations in Germany (55, est. 46, prior 39) and Eurozone (54.4, prior 32.8) rebounded, although current conditions remained weak (Germany -66.0, est. -66.5, prior -64.3).
Eurozone final 3Q GDP was slightly reduced at 12.5%q/q (from 12.6%q/q), slightly firmer household consumption offset by reductions in capex and government spending.
Event Outlook
Australia: The Westpac-MI Consumer Sentiment Survey hit a seven-year high in the November update. The December survey will capture developments around the COVID vaccines, a further easing of domestic restrictions, and a surge in the S&P500.
China: The November CPI is expected to print precariously close to negative territory (market f/c: 0.0%yr), largely a result of sluggish food-price inflation. Meanwhile, the deflationary pulse in the November PPI is set to moderate as commodity prices and domestic demand pick up (market f/c -1.8%yr).
US: JOLTS job openings should remain broadly stable in October, with elevated turnover pointing to ongoing churn in the labour market (market f/c: 6300k).
America’s virus curve is slowing flattening:
As Europe’s collapses:
Markets are reading this as a European recovery in due course:
With more upside for EUR ahead as global growth improves:
I expect this to last for a few more quarters before it reverses as US inflation crushes European:
That will also be the point of maximum risk for the Australian dollar and stocks as risk makes a comeback:
Because right now it is as dead as the dodo.
