Daily Market Commentary 20th November 2020

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The surging cases of coronavirus in Europe and the USA is taking it’s toll on market sentiment. The reaction of Governments, imposing heavy economic and social sanctions in certain jurisdictions, has dampened market confidence. The recent ‘vaccine equity rally’ has been halted and the US Dollar has found some support. The EUR trades 1.1815, while the GBP slipped back to 1.3230, with still no UK/EU Trade agreement?

New York has closed down schools and many States have imposed harsh restrictions, in an attempt to combat the surging virus rates. The confidence in the vaccine is being tested, from a chronological point of view, if not a effectiveness level. US existing home sales jumped 4.3%, reflecting the strong Housing markets, fuelled by unprecedented cheap finance.

Australian Unemployment numbers were better than expected, with the headline rate falling to 7%, but markets have seen through the mirage. The real Unemployment number is probably closer to double the official rate and has been hidden by the unprecedented welfare/employment support, from the Federal Government. Markets have reacted accordingly, with the AUD falling back to 0.7270, while the NZD held above 0.6900.

Virus infection levels continue to dominate markets, fueled by the media and Governments, as caution and control appear to be politically advantageous.

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