Weekly Market Commentary commencing 16th November 2020

A big week of gains and soaring risk appetite triggered by the vaccine news. The pending vaccines, Phizer and BioNtech,  announced that they have 90%+ effective immunisation rate and the prospect of a return to some form of economic normalcy, spurred markets to record highs. US equities surged to historical record highs and the spike in European and US virus infection rates was forgotten. US stocks rotated out of the pandemic friendly tech stocks to Pharma, Financiasl and Tourism. The risk-on trades enabled the US Dollar to settle lower, with the EUR trading up to 1.1820, while the GBP hit 1.3200. The Post-Brexit trade deal is still under negotiation and must be concluded in a matter of days, before the Brexit date at the end of 2020. The outcome of these negotiations will have significant and far reaching repercussions, on both the EU and UK economies, far into the future.

The rise in global economic confidence, allowed the commodity trade exposed currencies, to regain some lost mojo. The NZD jumped up to 0.6840, while the AUD traded above 0.7250, supported by the lagging reserve. The virus has allowed economic activity to continue, which is another blessing of isolation. These commodity currencies do remain extremely vulnerable to global economic events, so prudency in planning is key, to economic and business activity. The coming week will have plenty of statistical data releases, but it will likely be dominated by the virus/vaccine and US Politics.