Daily Market Commentary 25th November 2020

Global equities continued to surge with the Dow bursting through 30,000 for the first time. Markets are content the US Presidential transition is underway and that the vaccines, across the world, will perhaps allow a return to normal? The Democrats are busily appointing new administration officials, as the US begins the transfer of power. Markets will have time to digest how this will look closer to the inauguration next January. The record liquidity in markets has allowed this asset bubble to snowball.

The UK and EU appear to be nearing a post-Brexit trade deal, which has settled markets, while expectations should not be high until the details are made public. The surge in risk appetite has allowed the GBP to jump to 1.3340, while the EUR has broken above 1.1850. German GDP numbers were stronger than expected and the IFO Business Climate report, indicated improving business conditions.

Trade exposed commodity currencies delight in the rally in market confidence, with the NZD powering above 0.6950, while the AUD traded up to 0.7340. These currencies are surging on the positive news from global markets and the falling reserve. Markets remain vulnerable and these trade exposed economies, particularly so.