Forex News

Mexico’s IPC lost 738 points or 1.7% 41,674. On Friday, data from INEGI showed that exports increased in October 2.9% on an annual basis nudged by a 12.8% jump in auto sales, while imports declined 13.8% yoy dragged by a 34.4% plunge in consumption goods. On the policy side, the AMLO administration announced a plan to extend the northern border’s tax regime for four more years and that gives the southern border the same tax benefits as the north, with Chetumal declared a free zone.During the week, the IPC closed flattish.

The dollar index lost 0.2% to 91.8 on Friday, the lowest on a closing basis since April 29th, leaving the door open for deeper retracements as a vulnerable job market raised speculation over further monetary easing or additional government stimulus. Jobless claims came in higher than expected amid a worsening coronavirus pandemic and new lockdowns across the country. At the same time, dollar's diminishing safe-haven status in the light of developments toward a coronavirus vaccine and reduced uncertainty in US politics leaves room for further downside momentum. On the week, the dollar fell 0.6%, the second consecutive weekly decline and pushing the yearly loss to nearly 5%.

Brazil’s Ibovespa gained 348 points or 0.3% to 110,576 and hit a high since the last week of February, extending gains for the fifth straight session amid optimism that a coronavirus vaccine will be rolled out soon. On the domestic side, data from the FGV showed that industrial confidence gained 1.9 points to 113.1 in November, its highest reading in over ten years. Meanwhile, the unemployment rate went up to a fresh record high of 14.6% in the third quarter of the year amid the coronavirus crisis. On the corporate side, XP Inc said that it began studies on possible corporate structures after Itaú Unibanco announced a spin-off of its stake in the brokerage into a separate company. During the week, the Ibovespa jumped 4.2%.

Silver fell 3.7% to $22.6 an ounce on Friday and booked a 6.5% plunge on the week, the third consecutive weekly decline and the biggest since late-September. Increasing optimism that a coronavirus vaccine could be used soon and the economic recovery would gather steam in 2021 is raising investors' appetite for riskier assets although a weaker dollar, a slowdown in the US labour market recovery and signs the Fed and the ECB could provide more accommodation if necessary are preventing further losses. Silver is up near 25% so far this year.

Gold dropped 1.3% to $1,787 an ounce on Friday, remaining close to levels not seen since early-July, and lost 4.5% on the week, the biggest weekly decline since late-September, as risk appetite improved amid increasing optimism that a coronavirus vaccine could be used soon and the economic recovery would gather steam in 2021. However, a weaker dollar, a slowdown in the US labour market recovery and signs the Fed and the ECB could provide more accommodation if necessary are preventing further losses. Gold is up near 17% so far this year.

Canada’s TSX gained 57 points or 0.3% to 17,408 on Friday, as vaccine developments and an orderly transition of power in the US continues to nudge sentiment higher. On the domestic side, the Bank of Canada’s Governor Macklem said that the economy could recover faster than expected if consumer spending jumps in the wake of a successful coronavirus vaccination efforts. Meanwhile, a senior official at Canada’s drug regulator said that the country could approve Pfizer’s coronavirus vaccine around December. On the corporate side, Air Canada said that it reached a deal with its pilots to allow the airline to operate dedicated cargo aircraft. During the week, the TSX gained 2.3%.

Brent crude rose 0.8% to $48.2 a barrel on Friday, remaining close to an over eight-month high touched in the previous session and booking a 7.2% increase for the week. It is the fourth consecutive weekly gain, supported by optimism that a coronavirus vaccine will be rolled out soon, a possible delay in OPEC+’s planned production increase in January and the formal start of Joe Biden’s transition. Putting a lid on prices were concerns about near term fuel demand and oversupply worries.

WTI crude futures went down 0.4% to $45.5 a barrel on Friday, but booked an 8% gain for the week, its fourth consecutive weekly gain supported by hopes that a coronavirus vaccine will be rolled out soon, a possible delay in OPEC+’s planned production increase in January and the formal start of Joe Biden’s transition. However, investors remain worried about near term fuel demand as the number of coronavirus cases continue to rise worldwide. Also, oversupply concerns capped gains as Libya, OPEC member, has added more than 1.1 million bpd of output since early September. Traders will also closely monitor OPEC+ informal online talks which will take place on Saturday ahead of formal meetings scheduled for next week. OPEC+ is debating whether to ease oil output cuts starting from January, as it previously agreed, or to continue producing at the same rate.

The central bank of Colombia left its key interest rate steady at a record low of 1.75 percent on November 27th 2020, in line with market forecasts. Policymakers said recent indicators showed economic activity is recovering as expected and is expected to continue in 2021. Inflation in October fell to 1.75 percent from 1.97 percent in September and the outlook for 2021-2023 remains anchored at 3 percent.

The FTSE/JSE All Share Index in South Africa edged down 0.2% to 57882.5 on Friday, remaining near close levels not seen since February and booking a 2.1% gain on the week as prospects of a working coronavirus vaccine improved investors' risk appetite. Meanwhile, JPMorgan Chase & Co said it may be time to drop gold and tech stocks and buy into South Africa’s domestically focused stocks. On the coronavirus front, South African Health Minister said that government will discuss additional lockdown restrictions to control the resurgence of coronavirus. On the political front, President Cyril Ramaphosa is set to face the first motion of no confidence in his leadership in Parliament next week, which was filed by the African Transformation Movement (ATM) earlier this year before lockdown began.

Wall Street finished higher in thin post-holiday trading, with the S&P adding 9 points to a record 3,638, the Nasdaq 111 points to a record high of 12,206 and the Dow Jones gaining 38 points to 29,910. On the week, both the S&P 500 and the Dow booked a 2.2% gain and the Nasdaq surged 2.9%. Retailers were among the top performers amid hopes of strong Black Friday sales. Investors also weighed prospects that a coronavirus vaccine can be used soon, chances the Fed would raise asset purchases from the current pace of $120 billion a month, an orderly transition of power and mixed economic data released during the week. Meanwhile, more than 110K coronavirus infections were recorded on Thursday, the lowest in near 2 weeks although the number of hospitalizations hit a record of at least 90,481.

Corporate profits in Russia fell 43.5 percent to RUB 6.97 trillion in the first nine months of 2020 from RUB 12.35 trillion in the corresponding period of the previous year. Profits fell in manufacturing (-42.3 percent); mining (-36.5 percent), in particular oil and natural gas production (-16.4 percent); wholesale and retail trade; repair of motor vehicles and motorcycles (-62.8 percent); electricity, gas, steam & air conditioning (-62.2 percent); and transport & storage (-63.6 percent).

The IBEX 35 climbed 86 points, or 1.1% to 8,191 on Friday, the highest since March 6th and booking a 2.7% weekly gain. Banco BBVA was among the top performers, up over 4% while Sabadell was down more than 12% after merger talks between the two lenders ended after the companies failed to agree on financial terms. On the economic data front, recent figures showed business confidence improved to a nine-month high in November while retail sales fell for the eighth consecutive month in October but at the softest pace in the current sequence. Meantime, Spain reported 12.3 thousand new Covid-19 infections on Thursday, up from 10.2 thousand the day before.

The FTSE 100 cut early losses to close 0.1% higher at 6,368 on Friday, as hopes of a post-Brexit trade deal provided some support after EU negotiator Michel Barnier confirmed he was travelling to London to continue face-to-face talks this weekend. Earlier in the session, concerns over negotiations mounted as Barnier reportedly said that he was not able to say yet whether a new post-Brexit trade deal would be ready in time. Meanwhile, news of tougher tiered restrictions for England weighed on sentiment as only 1% of the population will be granted light restrictions after the national lockdown ends on December 2nd. For the week, the FTSE 100 added 0.3%.

The CAC 40 rose 31 points, or 0.6% to 5,598 on Friday, the highest since February 26th after the latest data showed the economy rebounded faster than initially thought in Q3 and household consumption grew more than expected in October. Also, consumer prices rebounded in November. On the coronavirus front, France tightened rules for hospitality until January 20th despite hospitalizations fell to 10,666 on Thursday from 11,420. On the corporate front, Electricite gained amid reports that France and the EU are close to agreeing on nuclear regulations. The CAC 40 gained about 2% in the last week of November.

The FTSE MIB added 151 points, or 0.7% to 22,352 on Friday, the highest since February 27th and recovering from a 0.5% loss in the previous session, and in line with its European peers. Traders continued to monitor coronavirus vaccine developments, growing infections and further restrictions. In Italy, Covid-19 cases rose by 28.3 thousand on Friday, down from 29 thousand the day before. The FTSE MIB advanced 3% in the last week of November, extending a 3.8% gain in the previous week.

European stock markets closed slightly higher in muted trading on Friday, with Frankfurt's DAX 30 gaining 0.4% to end at 13,336, its highest level since February 21st. Data showed the Eurozone economic sentiment indicator fell less than expected in November, while third-quarter GDP figures for France were revised higher. Meanwhile, EU Brexit negotiator Michel Barnier confirmed he is traveling to London tonight to continue face-to-face trade talks this weekend. On a more negative note, investors remained concerned about coronavirus-induced restrictions as Germany extended its lockdown until December 20th and France tightened rules for the hospitality sector until January 20th. At the same time, Hungary and Poland pledged to maintain their veto of the EU's budget and the pandemic relief fund, according to a joint statement released on Thursday. For the week, the DAX 30 gained 1.5%.

The Canadian dollar touched $1.2977, its highest level since November 9th, as Bank of Canada Governor Macklem said that the country’s economy could recover faster than expected if consumer spending jumps in the wake of a successful COVID-19 vaccination effort. At the same time, a senior official at Canada’s drug regulator said that the country could approve Pfizer’s coronavirus vaccine around December. The currency was also supported by a weaker dollar.

NASDAQ 100 increased to a 12-week high of 12269

The Baltic Dry Index gained 7.1% to an over 3-week high of 1,230 in the last week of November, the biggest weekly gain since early October and following a 3% rise in the previous week, pushed by stronger rates across all vessel segments. The capesize index, which tracks iron ore and coal cargos advanced 6.8%; the panamax index, which measures coal or grain cargos climbed 5.6% and the supramax index surged 9.8%. Considering Friday only, the Baltic dry index went up 0.9%.