Europe stocks head higher after record breaking US session
|After a record setting session in the US, EU stocks are heading broadly higher, although the pace of gains suggest that the risk rally is easing slightly. Vaccine optimism, EU governments starting to ease lockdown restrictions and more US political clarity have driven stocks firmly higher across the start of the week. However, investors are now looking ahead to a slew of US data due later today for further cues ahead of the Thanksgiving break.
The Dow broke above 30,000 for the first time ever, supported by reports that market friendly Janet Yellen could become the next Treasury Secretary. The markets are reading this as a sign that Joe Biden could be more interested in the economic recovery than pursuing aggressive regulatory policy.
A viable vaccine is desperately needed, confirmed by yesterday's European PMIs which show the region heading for a double dip recession following lockdown restrictions in November. However, news that Macron is easing lockdown restrictions after claiming that the second wave has passed is keeping the mood buoyant and risk assets in demand.
Spending review
Today UK Chancellor Rishi Sunak's one year spending review will be in focus. There are suggestions that the foreign aid budget will be cut in addition to a public sector pay freeze, which is likely to be met with a frosty reaction. More funds are also expected to be allocated to helping those get back into the labour market after the covid culling.
Oil extends gains
Oil prices continue to bound higher focusing on the prospect of a viable vaccine improving future demand, whilst shrugging off near term concerns of building crude supplies. US crude inventories rose by 3.8 million barrels last week according to the API, EIA data is due later today.
Data coming
Looking ahead there are several key US economic reports that will be released, including GDP, jobless claims and durable goods which could provide plenty of volatility for trading opportunities.
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