Global equities rally accelerates on Covid vaccine hopes
Global stocks rallied today as the market reacted on the latest Covid-19 vaccine and antibody news. Yesterday, Pfizer announced that its vaccine had proven 90% effective in its tests. This means that the next stage will be for regulators, including the Food and Drug Administrator (FDA) to issue an emergency authorisation for the vaccine. Still, some experts are worried about the safety of the vaccine. Also, in a statement yesterday, the FDA gave Eli Lilly authorisation for its monoclonal antibody for treating the virus. In the United States, Dow Jones futures are up by more than 115 points while in Europe, the FTSE 100 and CAC 40 index are up by almost 1%.
The British pound rose against the US dollar as traders reacted to the latest UK jobs numbers. In a report earlier today, the Office of National Statistics (ONS) said that more than 29.8k people filed for jobless claims in October. That figure was better than September’s increase of 40.2k. Analysts polled by Reuters were expecting the number of claims to jump by 50k. Further, the numbers showed that average earnings without bonus increased by 1.9% in September. With bonuses, the wages rose by more than 1.3%. Additionally, the unemployment rate rose from 4.5% in August to 4.8% in September.
The New Zealand dollar rose slightly as the country’s central bank started its monetary policy meeting. Analysts believe that the bank will leave interest rates unchanged at the current 0.25%. Like the Bank of England (BOE), they also expect it to boost its asset purchases. Analysts will be watching for any signals that the bank is considering cutting interest rates to the negative territory. Earlier today, the country’s statistics office released strong electronic card sales numbers. The overall sales rose by an annualised rate of 8.2% and a monthly rate of 8.8% fuelled by restaurant and cafes.
The EUR/GBP pair dropped to a low of 0.8910, which is the lowest it has been since September 4. On the four-hour chart, the pair managed to move below the lower side of the descending channel. The price has also moved below the 25-day and 50-day exponential moving averages. The two lines of the Relative Vigour Index (RVI) have also moved below the neutral line. Therefore, the pair is likely to continue falling as bears aim for the next support at 0.8850.
The EUR/USD pair dropped to an intraday low of 1.1781 as traders continued to react to the vaccine news. That was significantly below yesterday’s high of 1.1921. On the four-hour chart, the price has managed to move below the 15-day and 25-day exponential moving averages while the Relative Strength Index (RSI) has fallen from a high of 74 to the current 45. Therefore, the pair is likely to continue falling as bears aim for the next support at 1.1750. The resistance for this trade will be the October 21 high of 1.1880.
The German DAX index rose to an intraday high of €13,291 as traders reacted to the strong earnings by Henkel and the latest Covid-19 vaccine. On the four-hour chart, the price has pared back some of these gains and is now trading at €13,065. The price is also slightly above the previous resistance at €12,955. It is also slightly above the 78.6% Fibonacci retracement level. Therefore, the index is likely to continue rising as bulls aim for the YTD high of €13,455.