Oil hits 9-month high

GURU WISDOM

“He who has a why to live can bear almost any how.” —Friedrich Nietzsche
 

MARKETS

*Daily closing price
↗ EUR/USD    1.2148        (+0.12%)
↗ GBP/USD    1.3325        (+0.06%)
↗ USD/JPY    104.02        (+0.05%)
↘ S&P 500    3647.49    (-0.44%)
↘ Hang Seng    26,389.52    (-0.44%)
↘ Gold        1828.09    (-0.54%)
↗ Oil (Brent)    50.32        (+0.48%)
↗ Bitcoin    19,184.0    (+0.02%)
 

NEWS

WTI breaking out

Oil made a fresh 9-month high on Monday with Brent crude closing back over the closely-watched $50 per barrel level. The price gains were capped by OPEC cutting its 2021 demand forecast in its monthly report released Monday, citing higher covid cases that are likely to rise further over the winter. 


The optimism around the early-stage rollout of vaccines has played well for oil markets which is trading higher alongside other ’reopening’ trades. The biggest downside risk is in the near term, whereby oil demand can suffer at the hand of wide-scale lockdowns, which just started in Germany and the UK and some expect in the United States.
 

New variant

Market reaction has been muted so far but any news about a ‘new variant’ or ‘new strain’ would be about as bad news as can be expected. UK Health Secretary Matt Hancock suggested the new variant is growing faster than existing variants. The biggest worry that would unwind all the vaccine-led optimism in and out of financial markets would be if the recently-approved vaccines are ineffective on the new variant/strain. This is not known to be the case.
 

Biden wins

Joe Biden has taken another step towards the White House on Monday by officially being nominated by the Electoral Colleges that cast their votes for president. Each Electoral College represents a different number of seats of which Biden has a clear majority. It’s nearly a foregone conclusion that Biden will be the next US president but President Trump’s claims of voter fraud mean the process is a little less certain than usual. Biden will only officially become president according to the US constitution when he is inaugurated in January.  
 

DAY AHEAD 

*Times in GMT
02:00    CNY    Industrial Production (YoY)(Nov)     6.9 %    
02:00    CNY    Retail Sales (YoY)(Nov)             4.3 %
07:00    GBP    Claimant Count Change(Nov)         50 K    -29.8 K    
07:00    GBP    ILO Unemployment Rate (3M)(Oct)     5.1 %    4.8 %
14:15    USD    Industrial Production (MoM)(Nov)     0.3 %    1.1 %