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As expected, following Pfizer’s announcement, Moderna published phase 3 results presumably showing nearly 95% protection. Nevertheless, we shouldn’t expect a massive distribution until the middle of next year. Besides that, the number of conspiracy theorists is growing; meanwhile, confidence in a vaccine remains low. According to a study conducted by EL PAÍS, just 24% of Spaniards would get the Covid vaccine as soon as possible. In Europe, the October poll by the public CIS research institute showed that only 40.2% of respondents would get vaccinated “immediately”. In the US, on the other hand, the percentage of American adults who said they would not be vaccinated dropped to 42 percent from 50 percent in September. Skepticism about a rushed vaccine still presents a significant challenge for officials who will need to convince the public that any approved coronavirus vaccine is safe.
It is true that at the beginning this news brought certain positivity to the markets, at one point even triggering a sector rotation from techs to cyclical, but over the last week equity markets consolidated. Among other factors, it can contribute to the spike in the Covid-19 cases around the planet. Besides that,
the US Treasury has decided not to extend several emergency lending facilities set up by the Federal Reserve at the start of the coronavirus pandemic. In other words, five pandemic facilities could see closed on Dec. 31 and unused funds will have to be returned unless Congress acts. Meanwhile, first-time jobless claims once again rose by 31,000 in the week ended Nov. 14 to a seasonally adjusted 742,000. However, as we learned throughout the year, the negative effect is temporary.
Talking about the US elections Donald Trump still refused to concede defeat. President’s lawyer Rudi Giuliani has stated that the software used in the US presidential election is owned by the Canadian company Dominion, linked to the Venezuelan firm Smartmatic, through the Spanish corporation Indra which, he said, is based in Barcelona. It’s quite unlikely that the result will change but in the case, fraud will be demonstrated it could be historic.
In Europe, the stimulus plan was once again delayed due to a veto from Hungary and Poland. Even though, ECB’s President Christine Lagarde promised a forceful monetary stimulus package in December, highlighting its priority. She has also warned that the 19-nation euro region is expected to be “severely affected” by the rapid increase in infections and restrictions. The next policy meeting will take place on Dec.10 and many expect a stimulus increase at that time. For now, in order to ensure credit costs remain low for companies, governments, and consumers, the organism will continue applying to emergency bond-buying.
The Brexit saga, meanwhile, is still with us. Talks between the UK and the EU were disrupted after an EU negotiator tested positive for coronavirus but resumed virtually shortly afterward. On the positive side, European Commission President Ursula von der Leyen said on Friday that “better progress” was made, although she added, “there are still quite some meters to the finish line.” She also reiterated that they still have a lot of work to do and the pressure is high.
Macroeconomic Data & Events
In the upcoming week, we will pay attention to the flash PMIs Flash surveys from the Eurozone, UK, and the US. This data will help us understand how the second wave, together with the US elections affect business conditions. Another key macro will be a fresh estimate of third-quarter GDP, personal income, spending and prices, durable goods orders, home sales, and house prices in the US; the minutes from the last FOMC meeting; fresh estimates of the third-quarter GDP in France and Germany; and industrial production in Japan, South Korea, Thailand, Singapore, and Vietnam, together with China’s industrial profits. It is important to mention that minutes from the latest Federal Reserve meeting will give a clue on whether we should expect policy changes in December.
November 23: Flash PMI for US, Eurozone, UK; US Chicago Fed national activity index (Oct).
November 24: Germany 3Q GDP, France business confidence, Germany Ifo surveys, US Case-Shiller home price, and US Richmond Fed manufacturing index.
November 25: France unemployment claims, US durable goods orders, US personal income and spending, US 3Q GDP, FOMC minutes.
November 26: South Korea interest rate decision, Germany and France consumer confidence.
November 27: China industrial profits, UK housing prices, France 3Q GDP, Italy business and consumer confidence, and Euro area consumer confidence.
