Unpredictability is set to permeate the global market this week as short-term volatility continues to dominate.

Weekly market watch for the week of 16 November 2020

Week starting 16-11-2020


USD

  • The unpredictable US Dollar has kept much of the world’s attention following a photo finish to the Presidential election.
  • This week, October’s retail sales are likely to increase by 0.4% month-on-month, with export and import prices anticipated to recover by 0.3% each for October.
  • Covid-19 cases will likely drive the markets alongside Donald Trump’s unwillingness to hand over power.
  • Vaccine talks will also drive the markets as Pfizer faces stiff competition in the race towards finalising its vaccine.

EUR

  • The Euro was relatively volatile last week as most of Europe began implementing renewed restrictions.
  • Some lower tier releases are due out for the Eurozone this week, with the current account balance expected to rise to €19.9 Billion on Thursday.
  • A drop in consumer confidence is also anticipated for Friday with a drop from -16 to -18, showing an increased pessimism across Europe.
  • Covid-19 cases are likely to drive the overall demand for the Euro while any Brexit-related updates could also push the currency around this week.

GBP

  • The Pound managed to shrug off some negative sentiment last week, following worse-than-expected data reports.
  • Headline inflation is anticipated to remain at 0.5% while the core figure is likely to stay unchanged at 1.3%.
  • On Friday, retail sales will be released straight after the second national lockdown – panic-buying could assist the data, despite an expected drop of 0.4% for October.
  • Brexit updates will likely be on the front page for the rest of the week as negotiations remain deadlocked on key issues.

ZAR

  • The South African Rand continues to rally along with emerging market currencies on the back of promising vaccine talks and a Joe Biden presidency.
  • This week, retail sales for September is forecast to rise by 5% after a 4% climb in August.
  • The South African Reserve Bank (SARB) will be making its interest rate decision on Thursday.
  • It is largely anticipated that the SARB will keep rates at 3.5%. Should there be a rate cut, the Rand is expected to weaken.

AUD

  • The Aussie Dollar looked good last week as it rode the wave of market sentiment on the back of successful vaccine talks.
  • Australian labour numbers are due out this week, with the unemployment rate expected to rise to 7.1% and a net job loss of 35,000 projected for October.
  • The Reserve Bank of Australia (RBA) will be releasing its meeting minutes this week after the central bank cut its rates.
  • Philip Lowe is set to make a few statements in the first half of the week while Christopher Kent is set to speak at a symposium on Tuesday.
  • Market watchers should listen out for more dovish tones from the RBA.

NZD

  • The Kiwi Dollar has been largely driven by global risk sentiment and counter-currency action for the last few weeks and this week should not be any different with New Zealand’s light data calendar.
  • Quarterly PPI numbers are due out on Tuesday. Input prices should rise by 0.3% while output prices should climb by 0.1%. However, this should not have much of an impact on NZD pairs.
  • Covid-19 headlines will guide risk-taking and overall demand for the higher yielding currencies.

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