Forex Today: Rising Sino-American tensions curb vaccine and stimulus enthusiasm, Brexit eyed

Here is what you need to know on Monday, December 7:

The first full week of December kicks off with a mixed market mood. New US sanctions on Chinese officials weigh on the market mood while weak Nonfarm Payrolls raise hopes for a stimulus package. The FDA is set to approve a COVID-19 vaccine later in the week and Brexit talks continue at a higher intensity.

Nonfarm Payrolls and stimulus: The US gained only 245,000 jobs in November, nearly half the expected increase. The spread of the virus in America and the lapse of several federal support programs are taking their toll. Investors hope that the figures will convince Congress to strike a new stimulus deal, perhaps along the lines of the $908 billion bipartisan proposals. Reports suggest Senate Majority Leader Mitch McConnell is reluctant to move. 

Virus fears: The seven-day average of daily coronavirus deaths has hit 2,171, topping the record seen in the spring. Hospitalizations are at a peak of over 101,000 and average daily cases is nearing 200,000. California has enacted strict limits and other states are also curbing movement. Infections remain elevated in Germany and edging lower in other large European countries.

Vaccine hopes: The US Food and Drugs Administration (FDA) is set to approve the Pfizer/BioNTech covid immunization on Thursday, opening the door to the first injections on the following day. The UK will administer its first inoculations on Tuesday. Optimism about vaccines keeps markets bid.

Sino-American tensions have risen again amid a report stating the US is preparing new sanctions against around 14 Chinese officials. Beijing said it firmly opposes new restrictions. 

Brexit: UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen spoke on Saturday and agreed to extend talks. Intense negotiations continue in Brussels with reports on compromises yet without a breakthrough. Chief EU Negotiator Michel Barnier told envoys that disagreements remain on the three contentious issues – fisheries, governance, and the level-playing field. GBP/USD is trading around 1.34, off the highs seen late last week.

EUR/USD is changing hands above 1.21 after German industrial output beat expectations at 3.2% in October. Markets await the European Central Bank's decision on Thursday, with a potential expansion of the bond-buying scheme eyed. 

Gold is consolidating its gains around $1,840 while oil price edge lower, with WTI around $46. 

Cryptocurrencies are off their highs. Bitcoin is changing hands at around $19,000. 

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