Mnuchin plans to allow several of the Federal Reserve’s emergency lending programs to expire on December 31
Wall Street stocks finished marginally higher overnight due to renewed fiscal stimulus hopes. However, rapidly rising coronavirus cases and the resulting government restrictions capped gains despite recent positive vaccine announcements. On the data front, US jobless claims rose for the first time since early October, reaching 742,000 versus 710,000 expected, in a sign that the labor market faces an unsteady path to recovery. As a result, the S&P 500 gained 0.39%, the Dow Jones Industrial Average added 0.2%, and the tech-heavy Nasdaq Composite climbed 0.9%.
Asian equities were mixed in muted trading on Friday amid the growing dispute between U.S. Treasury Secretary Steven Mnuchin and the Federal Reserve over funds aimed to help businesses after Mnuchin sought to end the central bank’s relief programs. Against this backdrop, Japan’s benchmark Nikkei 225 slipped 0.4% while Australia’s S&P/ASX 200 dipped 0.12%. Hong Kong’s Hang Seng and the Shanghai Composite gained nearly 0.4%.
In Europe, stocks opened marginally lower but managed to bounce quickly as investor sentiment has improved somewhat despite Mnuchin’s plans to allow several of the Federal Reserve’s emergency lending programs to expire on December 31. However, the bullish potential in the markets remains limited as market players continue to monitor spiraling coronavirus cases around the world. The pan-European Stoxx 600 gained 0.2% in early trade, with most sectors entering positive territory.
Meanwhile, EURUSD is trading little changed, extending the consolidative fashion on Friday. The euro still struggles to overcome the 1.1890 resistance which has become a strong barrier for bullish attempts in past sessions. Lingering hopes of an effective vaccine in the short-term horizon help the common currency to stay afloat while rising cases continue to cap gains. As such, the pair will likely stay in a consolidation mode in the near term before deciding on a further direction. Technically, the longer the prices stay below the 1.19 barrier, the higher downside risks could become.