Despite the bearish bias, vaccine and stimulus hopes kept market sentiment afloat
Wall Street stocks jumped overnight amid renewed hopes Congress could make progress towards a new coronavirus aid package after the reports that Mnuchin and House Speaker Nancy Pelosi were scheduled to discuss prospects for a package. On the data front, the ISM’s November manufacturing index dipped to 57.5 in November from 59.3 previously, versus 58 expected, while the IHS Markit final manufacturing PMI reading for November was unchanged at 56.7 from its initial reading. As a result, the Dow Jones and the Nasdaq Composite were up 0.62% and 1.28%, respectively while the S&P 500 rose 1.1%.
Asian stock markets were mixed and little changed on Wednesday as some investors took profit following the recent rally while vaccine and stimulus hopes kept market sentiment afloat. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.06%, retreating slightly from last week’s all-time high. Japanese stocks fell 0.17% after setting a new 29-year high.
Tracking mixed global sentiment, European stocks opened marginally lower despite Pfizer and BioNTech said their vaccine could be launched in the European Union as early as this month. The U.K. became the first country in the world to authorize the Pfizer-BioNTech coronavirus vaccine, making it available from next week. now, the market focus shifts to the latest private payrolls data from US ADP later today. On the data front, German retail sales for October rose 2.6% month on month and 8.2% year on year, beating expectations.
Meanwhile, EURUSD jumped to May 2018 highs marginally below 1.2100. In Europe, the pair saw a local reversal and proceeded to a bearish correction which looks appropriate considering the overbought conditions. As of writing, the pair was changing hands around 1.2055, down just 0.12% on the day. The rally in the common currency has stalled as the greenback started to regain some traction following fresh 2020 lows registered earlier in the day. In the short term, the pair needs to hold above 1.2000 in order to avoid a more aggressive retreat.