Quiet trade expected on Thanksgiving

European bourses are seen advancing on Friday as vaccine optimism and hopes of more economic stimulus under Joe Biden, overshadowed soft US data and slumping German consumer confidence. A relatively quiet session is on the cards with the US closed for Thanksgiving

Hopes that a covid vaccine will see a rapid return to economic growth continues to underpin the market mood. Meanwhile further signs of political stability in the US, the world’s largest economy is adding to the upbeat mood. Speculation is growing that Joe Biden coul increase government spending to support the pandemic hit economy.

US data yesterday painted a mixed picture of the state of the US economy. Whilst Q3 GDP was roughly inline with expectations, durable goods impressed. However, trouble is seen brewing in the labour market, with initial jobless claims rising once again to u772k, up from 748k. The US labour market recovery appears not only to have stalled, but to be slowly reversing, a worrying trend.

German consumer confidence drops
Data from Europe this morning was far from encouraging. German GFK consumer for December declined by more than expected to -6.7, down from -3.2 in Nov and worse than -5 expected. Consumer morale in the Eurozone’s largest economy is feeling the weight of the second nationwide lockdown, which is now being extended until 20th December.

FTSE advances despite UK’s grim outlook
The FTSE is managing to advance even after a stark warning from the Chancellor yesterday that the UK will borrow £400 billion this year to support the UK economy through the covid crisis. Whilst the OBR forecast an -11.3% contraction of the UK economy. The OBR also warned that failure to secure a Brexit deal will see a further 2% shaved off UK economic output.

Government’s tier breakdown in focus
Today the British government will lay out the covid restrictions for each local authority in England for when the economy reopens next week. How strict the rules are, particularly in the large cities will determine how quickly the UK economy will be able to bounce back from the latest national lockdown.

FTSE Chart

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.