Collinson FX: December 3 - Australian GDP jumps more than expected

by Collinson FX 3 Dec 2020 05:15 PST 19 November 2020

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Collinson FX: December 3 - Australian GDP jumps more than expected

The UK FTSE was the only major bourse in Europe to rally overnight, boosted by the approval for release of the Pfizer-BioNtech vaccine, next week. The EU/UK post-Brexit trade deal negotiations continue to drag on, damaging both sides, with a compromise likely. The extent of the trade-offs will determine the value of any final settlement and this will not be known until details are released. The Dollar continues to decline, with the EUR hitting 1.2100, while the GBP traded up to 1.3360, supported by vaccine news.

Australian GDP jumped more than expected, 3.3% for the quarter and reduced the annualised contraction to 3.8%. This is a strong number, which could have been so much better, had not the second City of Melbourne been shut unnecessarily. The US added 307,000 private sector jobs, according to the ADP Jobs report, which missed expectations, while another fiscal stimulus was shot down in the Senate. The Fed Chairman Powell warned of ‘extraordinary uncertainty’ in the US and global economic outlooks.

Markets continue to ebb and flow as we head into the holiday season. Economic conditions are still threatened by the political restrictions imposed to combat the virus. Equities have been supported by a massive and unprecedented amount of monetary stimulus and vaccine prospects. Political power wielded by Governments, enabled by the virus across the West, are trumping economic activity and will be reflected in economic data.

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