Daily Market Commentary 1st December 2020

The massive rally for November is suffering profit taking, towards the end of the month. The post election rally has been labelled the ‘vaccine rally’, triggered by the announcement from various pharma companies, of the effectiveness rates of their upcoming vaccines. The rally has been bolstered by the conclusion of the US Presidential election, but tempered by the surging virus infection rates across Europe and the USA.

The Chicago PMI and Dallas Fed Manufacturing Index, were both softer than expected and this allowed negative sentiment to creep into markets. Equities dipped lower, although currencies remained relatively steady, considering. The EUR held 1.1950, while the GBP pushed  up towards 1.3350, with high expectations over a breakthrough in post-Brexit trade negotiations.

Commodity currencies drifted off recent highs, with the AUD falling back to 0.7350, while the NZD held 0.7020. NZ Business Confidence data was the most positive since the Labour Government was first elected in 2017, although still remains in negative territory. Vaccine/virus continues to be a strong influence in markets, although a closer look at growth and employment will play in markets this week, culminating in US employment data at the end of the week/beginning of December. Central Bank meeting will put some focus on monetary policy.