USD Weaker As Many Global Stocks Move Higher

The USD is weaker as global stocks move higher on vaccine and Brexit optimism. Astra-Zeneca released its vaccine trial results to show it is 70% effective. While this is not as high as Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA)'s vaccines, distribution will be easier given it can be stored at refrigerator temperatures. 
 
The world should be jumping for joy as the AstraZeneca (NASDAQ:AZN) delivery is a big deal as most of the developed world will be able to immunize its most at-risk population to COVID by the spring and likely the entire community by mid-year.
 
Equities up, commodities up, bond curves bear- steepen, dollar down. Risk sentiment improves as the AstraZeneca-Oxford vaccine shows 70% effective for participants with covid-19, with the effectiveness rising to 90% for using half a dose followed by a full one. The AstraZeneca-Oxford vaccine should benefit many EM countries as it costs only a fraction of the others and will be manufactured in EM countries from India to Brazil.
 
The Euro

The grind higher in EUR/USD continues, given the overall positive sentiment across EU asset classes. There has been some good demand since London started in the 1.1860-70 area, but it was reluctant to move initially. Last week it already topped at these levels, and the crucial resistance should be 1.1920-30. A break of that would open the door for a test of 1.20 again. However, it is Thanksgiving week in the US. Lately, the market has been in risk-reducing mode given that year-end is within reach, so it is difficult to gauge the market's appetite other than suggesting many small tickets are going through, but I guess they are adding up. As usual, USD/CNH sees good volume, and EUR and GBP numbers add up on the Brexit bounce.
 
 
Gold Woes

Despite all the dovish FED waxing, gold is still trying to form a base after the $100 drop two weeks ago on the back of Pfizer vaccine news. Given it has bounced off $1,850 about three times, there should be a fair amount of speculative interest around that level, and it might be safe to assume a sharp move lower should it break. 
 
There is still a lot of wood to be chopped to take out strategic longs. Those investors hold gold on a more medium-term basis, given considerable fiscal and monetary spending across G10 economies.
 
The only short-term potential trigger for a move higher might be the announcement of a new Treasury Secretary by US President-elect Joe Biden, with former Fed chair Janet Yellen being favored at the moment and the restart of discussions regarding a second US stimulus package.


The big questions 1) does the vaccine rally cause the Fed to sit on the fence until 2021, and 2)  does it lessen the chance for a  +1 trillion stimulus deal?
 
Oil

The oil market looks to be experiencing a bit of technical profit-taking skew into the NY Open as the air got a bit thin above WTI $43 on the first pass. The announcement over the weekend that US COVID-19 vaccinations could begin in early December has spurred another wave of optimism for oil and wider markets, bolstered today by the AstraZeneca version of the vaccine. The continuing increase in infections in the US and elsewhere has been the primary source of oil demand uncertainty ahead of the OPEC+ meeting at the end of this month. Progress on developing and distributing a vaccine de-risks the path back to normal for oil markets.