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Market News 【TOP1 Morning】Gold plunged by $40; Dollar bounces from a three-month low; Oil prices settle up over 2%

【TOP1 Morning】Gold plunged by $40; Dollar bounces from a three-month low; Oil prices settle up over 2%

AstraZeneca-Oxford Covid-19 vaccine was up to 90% effective; Dow jumps 300 points on vaccine hope.

TOPONE Markets Analyst
2020-11-24
694

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Yesterday Market Review


Gold


Gold fell nearly 2% to its lowest in four-months on Monday as better-than-expected U.S. business activity data and optimism over progress in COVID-19 vaccines boosted hopes for a swifter economic rebound and drove investors towards riskier assets.


The spot gold closed at $1836.79 per ounce; the volatility within the day is $1830.82-$1875.94.


“Gold broke below the key $1,850 level after an unbelievably strong U.S. PMI release just dampened the need for stimulus. No one was expecting such strong readings in both services and manufacturing,” said Edward Moya, senior market analyst at OANDA.


The upbeat data came after Britain’s AstraZeneca said its vaccine could be around 90% effective without any serious side effects.


Gold’s break below $1,850 triggered a wave of sell stops, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.


“While we do expect gold to go onto the defensive when the global economies start to show sustainable recoveries, the tailwinds behind the market have not yet been fully dissipated,” said StoneX analyst Rhona O’Connell in a note.


The silver closed at $23.571, the volatility within the day is $23.405-$24.377.


Forex


The dollar bounced off an almost three-month low against a basket of currencies hit on Monday.


The U.S. dollar index closed at 92.55; the volatility within the day is  92.00 - 92.79.


The dollar index was last up 0.2% at 92.60, after earlier dropping to 92.013, the lowest since Sept. 1. It is hovering just above technical support around 92, a conclusive break below which could usher in new weakness, analysts said.


The euro was last down 0.2% at $1.183.


Based on the Reuters dollar index, the next target for the euro is likely its September high near $1.2010, followed by the February 2018 high of $1.2555, Brown Brothers Harriman said.


The New Zealand dollar surged to a two-year high after strong retail sales data, before falling back to be little changed on the day at 0.6930 per dollar.


The pound was boosted by hopes for a Brexit deal. The EU’s chief Brexit negotiator said that fundamental divergences remain but both sides were pushing hard for a deal.


Sterling was last 0.1% up at $1.33.


Stock Market


Stocks rose on Monday after AstraZeneca and the University of Oxford said their coronavirus vaccine was up to 90% effective, becoming the third inoculation this month that was revealed to be effective in trial data.


The Dow Jones Industrial Average rose 327.79 points, or 1.12%, to close at 29,591.27. The S&P 500 rose 21.76 points, or 0.61%, to end at 3,579.30 while the Nasdaq Composite rose 25.66 points or  0.22% at 11,880.63.


Apple (AAPL-US) fell 2.97%; Facebook (FB-US) fell 0.47%; Alphabet (GOOGL-US) fell 0.51%; Amazon (AMZN-US) fell 0.033%; Microsoft (MSFT-US) fell 0.13 %.


AstraZeneca, shares of British pharmaceutical giant AstraZeneca fell more than 3% after the company said clinical trials showed its coronavirus vaccine has an average efficacy of 70% in preventing the virus. Its competitors Pfizer and Moderna previously said their Covid-19 vaccine candidates were more than 90% effective.


Regeneron gained as much as 3.9% after the Food and Drug Administration over the weekend granted an emergency use authorization for its antibody treatment REGN-COV2. Regeneron CEO Dr. Leonard Schleifer told CNBC Monday the company will provide the U.S. with 300,000 doses by early January.


United Airlines, Carnival Corp, shares of airlines and cruise operators rose broadly amid optimism around a potentially strong economic recovery as more vaccine trials show promising results. United Airlines traded higher by 2.6%. Carnival Corp advanced 3.7%.


Tesla, the electric vehicle company’s stock continued its recent surge on Monday, gaining 5.9%. Wedbush raised its price target on the stock to $560 per share from $500, and the firm said it was optimistic about Tesla’s upcoming Cybertruck and Model Y.


Chinese Tesla rival Nio recently reported forecast-beating earnings results, while profits at recent IPO Xpeng also came in ahead of Wall Street analyst estimates.


China’s market may grow faster than the U.S., especially if a Biden administration does not restore EV credits, but Tesla is poised to succeed in China, where as much as 40% of its sales may soon be.


Crude Oil


Oil prices rose more than 1% on Monday, extending last week’s gains as traders eyed a recovery in demand due to successful coronavirus vaccine trials.


West Texas Intermediate crude settled at $43.162, volatility within the day is $42.867-$43.274. International benchmark Brent crude closed at $45.689, volatility within the day is $44.961-$46.125.


Outlook for demand has improved with news indicating progress towards developing COVID-19 vaccines.


On the supply side, OPEC+, which meets on Nov. 30 and Dec. 1. It will look at options to extend their deal on output cuts by at least three months from January.


Smaller Russian oil companies are still planning to pump more crude this year, a group representing the producers said.


Yemen’s Iran-aligned Houthi group on Monday said it fired a missile that struck a Saudi Aramco site in the western city of Jeddah. There was no immediate Saudi confirmation of the claim. Aramco’s main oil facilities in are in the east.


Focus Today


10:30(GMT+8): RBA Debelle Speech;


22:00(GMT+8): ECB President Lagarde Speech;


23:00(GMT+8): United States CB Consumer Confidence (NOV), Forecast:98, Previous:100.9;

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