Risk On Relief Rally as Joe Biden Takes the White House 

European bourses are opening firmly on the front foot in a risk on relief rally as Joe Biden wins the race to the White House. Whilst Trump still refuses to accept the result, this isn’t affecting the joyous mood in the market, at least for now. 

The expectation is that Biden’s policies will be less confrontational than Trump’s which, combined with a spilt congress meaning less regulatory reform whilst making tax hikes unlikely – a Joe Biden win is looking like a win for the markets. A lot of this was priced in in last week’s impressive rally, however the risk on trade is spilling over into this week. 

Fiscal stimulus in lame duck session 

European bourses are advancing, US futures are pushing higher and even oil is rebounding after a tough previous week. However, the outlook could darken slightly from here given that Biden could also struggle to push a big covid fiscal stimulus package through congress. Whilst a rescue package is still possible, a larger package is unlikely putting more pressure on the Fed to act. The markets will be following stimulus talks closely across the lame duck period ahead of Joe Biden’s inauguration in January. 

Brent over $40 but for how long? 

With covid cases in the US surging and the total number of cases stateside nearing 10 million, the pressure is on for a deal. Oil for the time being is focusing on the Biden win, with Brent trading over $40 per barrel. However, without a big rescue package and as more of Europe locks down, this level is unlikely to hold for long. 

Brexit talks resume 

Brexit is very much back in focus as Michel Barnier returns to London to resume Brexit trade talks with his UK counterpart David Frost. Boris Johnson was sounding more upbeat over the chances of a deal after speaking with EC President Ursula von der Leyen saying that a deal was there to be had. However, differences remain over fisheries and a kevel plating field. Pressure is once again mounting as a mid-month soft deadline comes into focus. There is a good chance that rising covid cases and Joe Biden in the White House, who has previously cast doubt on Boris Johnson’s Brexit moves could focus minds to get a deal done. GBPUSD trades just shy of $1.32 amid risk on USD weakness and cautious pound strength. 

BoE’s Andrew Bailey could move GBP when he speaks this morning regarding covid and its impact.

FTSE

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

FXStreet Trading Signals now available!

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

Latest Analysis


Latest Forex Analysis

Editors’ Picks

GBP/USD hits new 2020 high near 1.35 on Brexit hopes

GBP/USD is rising toward 1.35, the highest since December 2020, shrugging off Brexit concerns. France may reportedly veto a deal if it sees too many compromises from the EU. The final US Services PMI met estimates.

GBP/USD News

EUR/USD holds onto 32-month highs after US data

EUR/USD is trading above 1.2150, the highest since April 2018. Optimism about a coronavirus vaccine and US fiscal stimulus boost markets and weigh on the safe-haven dollar. ISM Services PMI came out at 55.9, within estimates.

EUR/USD News

XAU/USD erases gains despite dollar’s weakness

Gold pulled back from weekly highs and dropped to $1823/oz, reaching a fresh daily low. It then rebounded, and as of writing, it trades at $1830, around the same level it closed on Wednesday.

Gold news

Crypto market relentlessly fighting for new yearly highs

Bitcoin is leading the recovery in the cryptocurrency market after reclaiming the position above $19,000. Ethereum has managed to bring down the critical hurdle at $600 while Ripple is holding slightly above $0.62.

Read more

Extra week of Black Friday!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info

Forex Majors

Cryptocurrencies

Signatures