Quiet trade expected on Thanksgiving
|European bourses are seen advancing on Friday as vaccine optimism and hopes of more economic stimulus under Joe Biden, overshadowed soft US data and slumping German consumer confidence. A relatively quiet session is on the cards with the US closed for Thanksgiving
Hopes that a covid vaccine will see a rapid return to economic growth continues to underpin the market mood. Meanwhile further signs of political stability in the US, the world’s largest economy is adding to the upbeat mood. Speculation is growing that Joe Biden could increase government spending to support the pandemic hit economy.
US data yesterday painted a mixed picture of the state of the US economy. Whilst Q3 GDP was roughly in-line with expectations, durable goods impressed. However, trouble is seen brewing in the labour market, with initial jobless claims rising once again to u772k, up from 748k. The US labour market recovery appears not only to have stalled, but to be slowly reversing, a worrying trend.
German consumer confidence drops
Data from Europe this morning was far from encouraging. German GFK consumer for December declined by more than expected to -6.7, down from -3.2 in Nov and worse than -5 expected. Consumer morale in the Eurozone’s largest economy is feeling the weight of the second nationwide lockdown, which is now being extended until 20th December.
FTSE advances despite UK’s grim outlook
The FTSE is managing to advance even after a stark warning from the Chancellor yesterday that the UK will borrow £400 billion this year to support the UK economy through the covid crisis. Whilst the OBR forecast an -11.3% contraction of the UK economy. The OBR also warned that failure to secure a Brexit deal will see a further 2% shaved off UK economic output.
Government’s tier breakdown in focus
Today the British government will lay out the covid restrictions for each local authority in England for when the economy reopens next week. How strict the rules are, particularly in the large cities will determine how quickly the UK economy will be able to bounce back from the latest national lockdown.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.