Key Points from This Week

Trump Refuses to Leave White House

Despite Democrat candidate Joe Biden having been widely accepted as wining the 2020 US elections, Trump has refused to accept the victory and remains in the White House. With nearly all states having reported in totality, Biden currently has 290 electoral college votes to Trump’s 217. However, Trump has accused certain states of electoral fraud and is calling for a recount which is delaying the process although there is very little expectation that Biden won’t eventually be announced as having officially won once all votes are counted.

COVID Vaccine Announced

Pfizer and its German partner BioNTech announced this week that the candidate COVID vaccine they have been working on for several months has proven to be over 90% effective. The drug will now be passed on for US approval which is expected to be granted to this month ahead of the drug being rolled out by governments, in initial stages, by the end of the year. The news caused a large spike in risk assets along with a firm sell off in gold as the market shifted into risk on mode.

RBNZ Announces New Lending Programme

The RBNZ added to its monetary policy support this week. The bank announced a new Funding for Lending Programme (FLP) which will come into effect in December. The programme, which is expected to be around $28 billion in size, depending on take-up, will offer funding directly to regional banks at a rate around the OCR. The FLP is aimed at lowering borrowing costs for households and struggling businesses and improving liquidity generally.

Key Events Next Week

US Retail Sales

Over a relatively quiet data schedule, US retail sales are among the key releases next week. As a core component of GDP, retail sales is always closely watched. The reading has rebounded firmly over recent months though, at 1.5% last, is still well below pre-pandemic levels. Traders will now be looking to see if there has been any further rebound or if momentum has been lost.

AUD Unemployment Rate

Traders will also be watching the Australian unemployment rate next week. The RBA recently sounded caution on the state of Australian employment which, prior to the pandemic had been a shining jewel for the bank. If next week’s reading shows further weakness, this could lead to fresh pressure on the Aussie with traders increasing their RBA easing expectations.

Keep An Eye On

EU/UK Trade Talks

Reports this week that talks could end next week if a deal is not agreed have drawn attention this week. Should talks falter, this will likely lead to a firm sell off in GBP with the BOE having recently warned about the risks of failing to achieve a deal, especially given the back drop of the Q4 lockdown in place which is already impacting the economy.

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