Traders Cheer Vaccine News
UK granted approval to Oxford-AstraZeneca coronavirus vaccine as it tries to contain the spread of the new, more infectious strain of coronavirus which has emerged in Britain. On Tuesday, UK recorded 53,135 new COVID-19 cases so the current situation is very challenging.
The approval of the vaccine provided some support to global markets although it remains to be seen whether traders will be ready to make any major moves in the last two trading sessions of this year.
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In the U.S., traders will continue to focus on the latest developments on the stimulus front. On Tuesday, Senate Majority Leader Mitch McConnell blocked the vote on stimulus checks and introduced a bill which combined bigger checks with several measures favored by Republicans. It remains to be seen whether this bill has any chances to succeed but traders continue to bet on additional economic support in early 2021.Advertisement
Oil Moves Higher After Bullish Inventory Report
Oil managed to settle above the $48 level after API Crude Oil Stock Change report indicated that crude inventories decreased by 4.8 million barrels while analysts expected that they would decline by 2.1 million barrels.
This data will still have to be confirmed by the EIA Weekly Petroleum Status Report which will be published today. Traditionally, traders focus mostly on the EIA data so oil may find itself under pressure if this report disappoints.
At this point, oil looks ready to test the psychologically important $50 level in early 2021 despite the continued problems on the coronavirus front and OPEC+ decision to increase production by 500,000 barrels per day (bpd) in January, which is good for energy-related stocks.
U.S. Dollar Tests Yearly Lows
The risk appetite continues to grow, and traders sell the U.S. dollar in order to bet on riskier assets.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is currently trying to settle below the yearly lows at 89.75.
This is a very important moment for many assets as the continuation of dollar’s downside move will signal that riskier assets are ready for another upside move. Dollar’s weakness should provide more support to stocks and dollar-denominated commodities.