Global equities rallied on Tuesday on the broad optimism on the virus front and the political situation in the US. The General Services Administration (GSA) which can ascertain the winner of a Presidential election based on certain criteria and govern under the law for presidential transitions, has recognised Joe Biden as the “apparent winner” and extended around $8 million in transition funding and making other resources available to the Biden transition team.
Investors digested more good news yesterday which eliminated some levels of uncertainties in the markets. In addition to the transition funding, the state of Michigan officially certifies the election results for Joe Biden, fuelling hopes that there is a less chance of a contested election.
In the US share market, major US equities leapt higher by more than 1% led by a mega-tech rally:
We saw another milestone in the US share market with the blue-chip gauge topping 30,000 for the first time.
In the FX space, major currencies were stronger against the US dollar. As risk sentiment improves, the greenback lost ground against its peers. Commodity-linked currencies were among the best performing G10 currencies.
Amid a relatively muted economic calendar, German GDP and IFO data and US housing data stood out:
The EURUSD found support on the encouraging data and firmed higher.
Source: GO MT4
The broad optimism in the markets triggered largely by vaccine updates and fuelling hopes that the pandemic may soon be under control is providing support to an-already battered energy market. Crude oil prices continued its rise to the upside on Tuesday. However, WTI pared some gains and eased from the $45 mark following another inventory stockpiles. The American Petroleum Institute reported 3.8 million barrels versus the previous addition of 4.174 million barrels during the week ended on November 20. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading at around $44.81 and $47.95 respectively. Traders will likely keep monitoring weekly oil reports and OPEC commitments to production cuts for fresh trading impetus.
The precious metal plunged the most in four months, underpinned by vaccine news and a stronger US dollar. As of writing, the XAUUSD pair was trading around $1,807.
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|Thursday, 26 November 2020
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