Weekly Market Commentary commencing 30th November

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A positive close to the week interrupted by the US Thanksgiving Holiday, followed by Black Friday. The vaccine rally continues, despite the lack of the distribution and the surge in virus infection levels. The Dow broke through the Big, Big number of 30,000, but later retreated. Global equities continue to trade at, or around record highs, despite the disrupted economies and soaring deficit and debt. Central Banks provide unprecedented and historical levels of liquidity through monetary policy and hold interest rates at, or near, zero. Asset bubbles are expanding to dangerous propotions.

The EU/UK post-Brexit trade deal is imminent, we are told, but the detail is what is important. The GBP drifted back to 1.3300, while the EUR surged back to 1.1950. Markets will react if this deal is completed over the weekend. The coming week has Central Bank meetings from the Bank of England, ECB and RBA. They will not announce anything of great import, as those arrows have all been fired, so now they can only tweak QE  monetary policy. The US will focus on growth and employment, with major US jobs reports being released towards the end of the week.

The trade exposed commodity currencies have been surging, with the NZD blowing through 0.7000, while the AUD is looking to regain 0.7400. Their prospects hinge on global events and they remain extremely vulnerable.

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