Thanksgiving celebrations fail to extend to Europe, with stocks pulling back after as Covid continues to hurt economic prospects. Meanwhile, the value story starts to come under the microscope given recent gains. 

  • European markets suffer as short-term fears dominate 
  • Value stocks struggle amid cloudy economic outlook 
  • Vaccine optimism only goes so far, with Covid cases on the rise 


In the absence of a cheery US disposition, we have seen European markets flounder somewhat as ongoing questions over the forthcoming economic difficulties overshadowed optimism over future recovery prospects. The outperformance in the more internationally focused FTSE 100 over the FTSE 250 highlights growing fears over the direction of travel for the UK economy. Weakness across banking and airline stocks highlight the fear that the UK will continue to struggle in its bid to get back to normality despite the recent vaccine optimism that has permeated through markets. Undoubtedly value stocks has plenty of upside to come, yet we could be at a point where investors will be left wondering just how long they have to wait until they can judge that actual recovery for themselves. 

While markets have largely been willing to overlook any dour data points in anticipation of a vaccine-fuelled recovery next year, the incessant rise in coronavirus cases does provide a sticking point for market sentiment. While traders have been willing to overlook short-term weakness in favour of future growth, we do need to see signs that recent lockdown measures are making a tangible difference to the trajectory of the virus. With Angela Merkel warning that the German partial lockdown would last until at least 20 December (and potentially January), the economic cost is swiftly racking up. In the US, record high cases in Texas and California were joined by a seven-month high in New York cases after they topped 7,000 a day. While many have cheered the prospect of a less divisive approach from Joe Biden, there is also a fear that he could hurt the US economy by enacting a nationwide lockdown after taking office. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures