Investors’ appetite for risk exposure grew stronger this week. Despite Covid accelerating across key economies, vaccine headlines have underpinned bullish momentum. At the same time, lingering worries over a contested U.S. election appear to be fading from the market’s risk profile.
Trading volume was light following the U.S. Thanksgiving holiday, but the S&P 500[1] and Nasdaq[2] Composite closed at record highs. Meanwhile, the US Dollar[3] continued to struggle as markets slide further into a risk-on stance. In spite of the weaker greenback, anti-fiat gold prices[4] collapsed to a four-month low. The trend in precious metals likely reflects a recent easing in dovishness across central banks.
UK-EU post-Brexit negotiations drove the Pound[5] lower against the Euro[6] with EUR/GBP[7] rising to its highest level since November 17. GBP/USD[8] managed to gain 0.25% against the weak greenback. Yet another week passed with negotiators from both sides failing to find common ground. Chances for an unorderly exit from the European Union appear nearly imminent with time quickly running out.
Oil[9] prices reflected the upbeat economic prospects that helped drive equity markets higher. U.S. crude oil futures climbed above the 45 handle for the first time since March. Traders will key in on the upcoming OPEC+ meeting scheduled to kick off on Monday. The key issue in next week’s meeting will be persuading hesitant member nations to extend the current round of output cuts as demand worries linger.
Cryptocurrency prices took a hit across the board to close out the week. Bitcoin[10] sank near 10% after rising to a new multi-year high earlier this month. November is still shaping up to be
