Daily Market Commentary 19th November 2020

Global equity markets tread water overnight and the US Dollar continued to drift, with the rise in risk appetite. Coronavirus infection levels continue to surge across Europe and the USA, but the market has been assured by the news on the vaccine front. UK and EU CPI inflation has been insipid, with the EU coming in at 0%, while the UK improved to 1.5% annually. Growth will continue to be challenged, as the recent European lock-downs, feed through to the economic data. The Post-Brexit EU/UK trade agreement, must come in the next few days and the devil will be in the detail.

US Building Permits and Housing Starts remained strong, as the US battles to recover, but there is no consensus on the virus and how to manage it. The virus has become very political, with many States opting for controlled reaction, while others opt for lock-downs and shades-of therein. The vaccine will hopefully make these inequities moot, but the damage will be in the record books. The EU Meeting will begin tonight and the blow-out record budget deficit will be considered, including the $750 Billion ‘communal’ virus bail-out package. This could be a cause of much apprehension, due to rising dissension amongst member States. EU/UK Trade negotiations/agreement will also likely to be a contentious issue on the agenda.

Australian Unemployment data is likely to be an issue locally, with a rise expected. The welfare measures have been largely extended, compliments of the deficit/debt, so employment is highly disguised and underrepresented.