News & Resources

Market Analysis

Latest Insights
Press Releases
Latest Insights

Weekly Market Digest
December 7 to December 11, 2020

by Don Curren | December 11, 2020

The vaccine express, the metaphorical train that’s going to get us to the oft-mentioned light at the end of the tunnel, accelerated sharply this week.

The UK’s version was the first to leave the station, with that nation beginning vaccinations using the Pfizer/BioNTech vaccine on Tuesday. Margaret Keenan, 90, a former jewelry shop assistant in a “Merry Christmas” T-shirt, was the first to be vaccinated, and an 81-year-old man named William Shakespeare was the second.

(In passing, I’d like to send out an emergency plea for a new metaphor for our current situation. Although very apt, “the light at the end of the tunnel” image has been so widely used that it really needs to be turned off, at least temporarily.)

Canada and Bahrain fired up the engines of their programs, as it were, approving the Pfizer/BioNTech product in the course of the week, and in the US, an advisory panel recommended emergency approval of that vaccine late in the week, although final approval from the FDA was still pending as of Friday morning

At the same time, Russia was rolling ahead on its own entirely distinct track, with authorities there injecting its own Sputnik 5 vaccine in the arms of thousands of volunteers.

As it did last week, the optimism surrounding COVID19 vaccines weighed on the US dollar on a trade-weighted basis. Trading in the greenback, however, was volatile and it managed a rebound Friday morning as investor optimism faded somewhat as negotiations among US lawmakers on a new fiscal package appeared to be stalemated.

What was negative for the US dollar, over the week as a whole, was positive for its Canadian and Australian dollars and the euro. Trading in the British pound was choppy as negotiations on a post-Brexit trade deal between the UK and the EU appeared to flounder, with British Prime Minister Boris Johnson speaking of a “strong possibility” of failure at one point in the week.

The Bank of Canada acknowledged the positive news about vaccines in its last policy statement of the year on Wednesday, but pledged to maintain extremely accommodative policy to support the economy’s fragile recovery.

The US Federal Reserve’s last policy-setting FOMC meeting of 2020 happens on begins Tuesday and ends on Wednesday next week, and the US central bank’s pronouncements will be closely perused to see how it views the crosscurrents at play in the US economy.

That’s likely be the most significant development on the macroeconomic/monetary policy front, although there are plenty of other scheduled events, including policy decisions from the Bank of England and the Bank of Japan on Thursday, consumer price data in both the UK and Canada on Wednesday, and retail sales data in the same two countries on Friday. US retail sales will be released on Wednesday, with the closely watched weekly jobless claims data coming on Thursday.

While the Fed will definitely elicit some attention, other data releases could be eclipsed, to a degree, by the continuing evolution of the vaccination programs around the world, and the savage toll the coronavirus is exacting in the US and elsewhere.

According to data from Johns Hopkins University, there were 69,833,475 identified cases of COVID-19 and 1,585,727 deaths around the world as of Friday, and 15,632,336 cases and 292,382 deaths in the US.


Suggested Reading   |   Cambridge Market Analysis

■ Consumers’ Economic Expectations Rise in the US​​​​​​ read article
■ US Inflation, Labor Market Klaxons Sound Warning Signals  read article
■ BOC Shows Optimism on Vaccines, But Reaffirms Stimulative Policy Stance  read article


Suggested Reading   |   Counterparties

■ LA Times: Infected after 5 minutes, from 20 feet away: South Korea study shows coronavirus’ spread indoors​  read article
■ Bank of Canada: Our quantitative easing operations: looking under the hood​​​​​  read article
■ NYT: Bergamo’s Pandemic Survivors Carry Scars Unseen and Incalculable​​​​​​  read article
■ BIS: The financial vulnerabilities driving firms to the exit  read article
■ NYT: Shift to a Not-So-Frozen North Is Well Underway, Scientists Warn  read article
■ Project Syndicate: What Yellen Must Do​​​​​​ read article
■ New Yorker: A Dad-Rocker in the State Department  read article
■ IMF: Cyber Risk is the New Threat to Financial Stability  read article
■ WSJ: Long a Holdout From Covid-19 Restrictions, Sweden Ends Its Pandemic Experiment ​​​​​​ read article
■ Bloomberg Opinion : Investors Risk Being Shipwrecked on Shiller’s Cape ​​​​​​ read article


Calendar for the Week Ahead

Monday, December 14
■ EUR – Industrial Production
■ AUD – Reserve Bank of Australia Meeting Minutes

​​​Tuesday, December 15
■ GBP – Employment Data
■ USD – Industrial Production

​​Wednesday, December 16
■ GBP– Consumer Price Index
■ CAD – Consumer Price Index
■ USD – Retail Sales
■ USD – Federal Reserve Interest Rate Decision
■ AUD – Gross Domestic Product
■ AUD – Employment Data

Thursday, December 17
​​■ EUR – Consumer Price Index
■ USD – Jobless Claims
■ GBP – Bank of England Interest Rate Decision
■ JPY – Consumer Price Index
■ JPY – Bank of Japan Interest Rate Decision

Friday, December 18
■ GBP – Retail Sales
■ CAD – Retail Sales


Don Curren
Market Strategist and Content Editor
dcurren@cambridgefx.com
@dbcurren

“Cambridge Global Payments” is a trade name, which in this document refers specifically to one or more of these legal entities: Cambridge Mercantile Corp., Cambridge Mercantile Corp. (U.S.A.), Cambridge Mercantile Corp. (Nevada), Cambridge Mercantile (Australia) Pty. Ltd.

Cambridge Global Payments (“Cambridge”) provides this document as general market information subject to: Cambridge’s copyright, and all contract terms in place, if any, between you and the Cambridge entity you have contracted with. This document is based on sources Cambridge considers reliable, but without independent verification. Cambridge makes no guarantee of its accuracy or completeness. Cambridge is not responsible for any errors in or related to the document, or for damages arising out of any person’s reliance upon this information. All charts or graphs are from publicly available sources or proprietary data. The information in this document is subject to sudden change without notice.

Cambridge may sell to you and/or buy from you foreign exchange instruments (including spot and/or derivative transactions; both kinds are here called “FXI”s) covered by Cambridge on a principal basis.

This document is NOT: 1) Advice of any kind, or 2) Approved or reviewed by any regulatory authority, or 3) An offer to sell or a solicitation of an offer to buy any FXIs, or to participate in any trading strategy.

Before acting on this document, you must consider the appropriateness of the information, based on your objectives, needs and finances. For advice, you must contact someone independent of Cambridge.

Certain FXIs mentioned in this document may be ineligible for sale in some locations, and/or unsuitable for you. Contact your Cambridge representative for further information regarding product availability/suitability before you enter into any FXI contract.

FXIs are volatile and may cause losses. Past performance of a FXI product cannot be relied on to determine future performance.

This document is intended only for persons in Canada, the US, and Australia. This document is not intended for persons in the UK or elsewhere in the EEA. In Australia, this publication has been distributed by Cambridge Mercantile (Australia) Pty. Ltd. (ABN 85 126 642 448, AFSL 351278); for the general information of its customers (as defined in the Corporations Act 2001). This entity makes no representations that the products or services mentioned in this document are available to persons in Australia or are necessarily suitable for any particular person or appropriate in accordance with local law.

Fees may be earned by Cambridge (and its agents) in respect of any business transacted with Cambridge.

The document is intended to be distributed in its entirety. Unless governing law permits otherwise, you must contact the applicable Cambridge if you wish to use Cambridge services to enter a transaction involving any instrument mentioned in this document.

© Copyright 2018, Cambridge Mercantile Corp., ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Cambridge Mercantile Corp. See www.cambridgefx.com for contact details.