Black Friday Madness The Week Ahead 23rd – 27th November 2020

Today’s Market Outlook 

G20 

Leaders of the world’s 20 biggest economies on Sunday endorsed a plan to extend a freeze in official debt service payments by the poorest countries to mid-2021 and backed a common approach for dealing with their debt problems. 

In a joint statement, Group of 20 leaders also strongly encouraged private creditors to take part in the initiative on comparable terms and said they were keeping an eye on the special challenges facing African and small island states. 

The G20 debt relief initiative – launched shortly after the start of the pandemic in the spring – has helped 46 of 73 eligible countries defer $5.7 billion in 2020 debt service payments, freeing up funds for countries to fight the pandemic and shore up their economies. 

ASIA 

Asian shares rose on Monday, pushing a broad regional index to a record high as investors pinned their hopes for economic revival on coronavirus vaccines, even as the world contends with surging case numbers and delays to fresh U.S. stimulus. 

Seoul’s Kospi was 1.83% higher as an optimistic earnings outlook for South Korean chip giants drove gains. 

Japanese markets were closed for a holiday, but Nikkei futures added 0.27% to 25,815

The White House (Trump administration) is close to issuing a list of 89 Chinese aerospace and other companies that would be unable to access U.S. technology exports due to their military ties, Reuters reported. A spokesman for the U.S. Department of Commerce declined to comment, the news agency said. Such a move would restrict the companies from buying American goods and technology, Reuters added. It could also fuel already-heightened tensions between the two nations as President-elect Joe Biden prepares to take over from Donald Trump. 

U.S. 

The dollar dropped to a two-and-a-half-year low as fast-tracked plans to roll out a Covid-19 vaccine in the U.S. bolstered appetite for risk assets. An index tracking the currency slipped 0.2% after U.S. officials said vaccinations may start in less than three weeks. 

This week will be holiday-shortened as investors take off Thursday and part of Friday in observance of the Thanksgiving holiday in the U.S. 

The New York Stock Exchange and Nasdaq will each close all day on Thursday, and trading will end early at 1 p.m. ET on Friday. Bond trading is also set to close early at 2 p.m. ET on Friday. 

While investors take a pause, retail companies are gearing up for what in typical years tends to be one of their busiest weeks. But this year, the throngs of holiday shoppers that usually take to stores across the country on Thanksgiving Day and Black Friday are expected to clear this year, as the pandemic pushes consumers onto their phones and laptops rather than to storefronts. 

A number of major retailers pre-announced that they will be closed on Thanksgiving Day, in a move both to help mitigate crowds and promote social distancing, and to give associates who have been working in-person throughout the pandemic a day off. Stores including Target (TGT), Walmart (WMT), Best Buy (BBY), Home Depot’s (HD), Lowe’s (LOW), Macy’s (M) and JCPenney (JCP) announced Thanksgiving Day closures, marking a departure from prior years when retailers scrambled to offer earlier and earlier opening hours to compete for deals-hungry customers. 

Still, many of these retailers have already begun offering Black Friday-type discounts in stores and online starting in late October and earlier this month. That’s expected to more than make up for the one-day closures by helping retailers capitalize on resilient consumer demand for goods during the pandemic. 

Oil prices pushed higher Monday on the news that the rollout of a Covid-19 vaccine before Christmas now looks likely. Adding to the positive tone were hopes that a meeting of the top producers next week would see curbs on output extended.  

U.S. crude futures traded 1.1% higher at $42.90 a barrel, while the international benchmark Brent contract rose 1.3% to $45.64, near their highest levels since September, having gained over 5% last week. 

Elsewhere, gold futures fell 0.1% to $1,871.55/oz. 

EUROPE 

European investors shared the brighter outlook in early trades, with pan-regional Euro Stoxx 50 futures gaining 0.29%, German DAX futures 0.26% higher and FTSE futures up 0.21%. 

This comes after Pfizer (NYSE:PFE), and German partner BioNTech, applied for U.S. FDA emergency drug authorization for their Covid-19 vaccine on Friday, the same day as Moderna (NASDAQ:MRNA) announced that it was close to seeking the same approval after promising news from its final-stage vaccine trial. 

Indications of the extent of the damage to the euro-zone economy from the recent restrictions many countries have implemented to stop the surge in Covid-19 cases will be in focus later Monday, in the form of flash November PMI data for the service and manufacturing sectors. 

The euro-zone composite output index is expected to fall to 45.8 in November from 50.0 in the previous month, with the services sector taking the brunt of the hit. 

The EUR/USD traded 0.2% higher at 1.1874. 

Overview for the Week Ahead 

A big data-filled week kicks off in Britain with economic releases from the biggest sector, services and manufacturing out on Monday. 

There are purchasing managers’ index data from several regions this week.  Meanwhile, keep an eye on Bitcoin again as price forecasts soar. Elsewhere, watch cruising stocks after the U.S. escalated its warning for cruise travel to the highest level.  Wednesday’s Federal Reserve meeting minutes might provide further indications that policymakers are ready to increase their asset purchases and possibly target purchases at the longer-end of the curve. 

All these events and more have the potential to influence the markets which means there is plenty of trading opportunities. 

Today’s High Impact Events

The times below are GMT+2. 

Monday 23rd November 

  • 11.40 – MPC Member Haldane Speaks 

Potential instruments to Trade: GBP Crosses.  

  • 16.00 – China CB Leading Index m/m 

Potential instruments to Trade: CNY Crosses.  

  • 16.45 – U.S. Flash Manufacturing PMI & Flash Services PMI 

Potential instruments to Trade: USD Crosses & Gold.  

  • 17.30 – U.K. Monetary Policy Report Hearings 

Potential instruments to Trade: GBP Crosses.  

  • 21.00 – Canada Gov. Council Member Gravelle Speaks 

Potential instruments to Trade: CAD Crosses.  

Tuesday 24th November 

  • 17.00 – U.S. CB Consumer Confidence & Richmond Manufacturing Index 

Potential instruments to Trade: USD Crosses.  

  • Tentative – U.K. Autumn Forecast Statement 

Potential instruments to Trade: GBP Crosses.  

  • 19.45 – Canada Gov. Council Member Wilkins Speaks 

Potential instruments to Trade: CAD Crosses.  

  • 22.00 – RBNZ Financial Stability Report 

Potential instruments to Trade: NZD Crosses.  

Wednesday 25th November  

  • 04.00 – RBNZ Gov. Orr Speaks 

Potential instruments to Trade: NZD Crosses.  

  • 11.00 – ECB Financial Stability Review 

Potential instruments to Trade: EUR Crosses.  

  • 15.30 – U.S. Prelim GDP q/q & Unemployment Claims 

Potential instruments to Trade: USD Crosses.  

  • 17.00 – Revised UoM Consumer Sentiment 

Potential instruments to Trade: USD Crosses.  

  • 21.00 – FOMC Meeting Minutes 

Potential instruments to Trade: USD Crosses.  

Thursday 26th November 

  • 02.30 – Australia Private Capital Expenditure q/q 

Potential instruments to Trade: AUD Crosses.  

  • 14.30 – ECB Monetary Policy Meeting Accounts 

Potential instruments to Trade: EUR Crosses.  

  • All-Day – Thanksgiving Day 

  National Holiday.  

Friday 27th November 

  • 01.30 – Japan Tokyo Core CPI y/y 

Potential instruments to Trade: JPY Crosses.  

  • 09.00 – German Import Prices m/m 

Potential instruments to Trade: EUR Crosses.  

  • 09.45 – French Consumer Spending m/m, Prelim CPI m/m & Prelim GDP q/q 

Potential instruments to Trade: EUR Crosses.  

  • Tentative – Italian 10-year Bond Auction 

Potential instruments to Trade: EUR Crosses.  

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