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Finance Update – The Vaccing Race is On

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Asia – China’s RCPA leaves US behind

Chinese indices are down this morning, led by the Shenzhen’s 1.18% drop. The Nikkei is up 0.42% and the Hang Seng 0.13%.

Yesterday, the US Chamber of Commerce expressed fears of being “left behind” after 15 Asia-Pacific countries, including Australia and led by China, signed their Regional Comprehensive Partnership Agreement, creating the world’s largest free-trade bloc.

Europe – ECB: more debt sustainable

European indices closed in the green yesterday, the FTSE adding 1.66% but the DAX a mere 0.47%.

ECB chief economist Philip Lane told reporters yesterday that the increase in COVID-induced public spending is sustainable, even at more than 100% of GDP, this after Poland and Hungary vetoed the EU’s €1.8 tn budget that includes a €750 bn recovery fund.

Americas – Biden briefed

As President-elect Biden prepares to receive his first national security briefing today, index futures this morning are showing some doubt after indices ended up yesterday, once again led by the small-caps Russel2000 with a 2.14% increase.

The USD continues down after yesterday’s Empire State Manufacturing Index shed 4 points to land at a disappointing 6.3., this as Fed VC Clarida said that the bank would not be tightening its policy on improving labour data.

And, as Boeing’s Max nears the end of its re-licensing process, the US House of Representatives is preparing to reform the Federal Aviation Administration’s certification procedures, said to have been lacking in the licensing process for the aircraft.

Commodities – Oil is cheery

WTI added a dollar throughout the day, peaking at $42.11 as the US session opened on COVID vaccine optimism before settling back halfway.

Corporate – Moderna tops Pfizer

Yesterday’s big news came from Moderna (+9.58%), a 10-year old pharma research company that published a 94.5% success rate for its new COVID vaccination. Contrary to Pfizer’s 90% success drug, this one does not require -74 degree storage capabilities.

Also yesterday, S&P Dow Jones Indices announced that Tesla Inc would join the S&P500 index in December, after snubbing them earlier this year. Shares jumped 14% after hours on the announcement.

Baidu yesterday lost 3.4% in NY trading after hours, after adding 1.9% throughout the session – this after booking a 1% increase in Q3 revenues, beating estimates with $4.16 bn.

EPS doubled YoY to $5.86. Reuters reports that the company plans to purchase the JOYY video streaming service for $3.6 bn in the following months.

Vodafone reported a 1.5% increase in revenues to €21.43 bn with earnings beating expectations at €0.04 per share.

Expect more earnings today from Home Depot, Walmart, EasyJet, Experian and Fortum.

Events

09:00 AM GMT Italy Trade Balance
10:00 AM GMT EU Construction Output
01:30 PM GMT US Retail sales. Redbook Index at 1:55. Industrial Production at 2:15 and Business Inventories at 3.
09:30 PM GMT OIL API Weekly Inventories
09:45 PM GMT NZ PPIs
11:50 PM GMT Japan Trade Balance
Midnight Australia New Home Sales. Wage Prices at 0:30 AM (+1)

Analysis

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