Morning Commentary: Endurance and Hope

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

Endurance and Hope Share this story: David Atkinson Foreign Exchange Sales Manager

Markets around the world are subdued as many economies and communities limp, quite frankly, into the end of 2020. Trading is thin, and some exchanges close early today. The story of the past quarter continues as we close out the year. In the U.S., the Dow Jones Industrial Average looks to be up on the year by 6%, the S&P 500 by 15% and the NASDAQ by an absolutely insane 43%. Looking around the world, the Euro Stoxx 50 is down 5%, the U.K.’s FTSE 100 is down 14%, Japan’s Nikkei index is up 16%, and China’s main stock index — the CSI 300 — is up 27%. Government bonds around the world are ending in the ranges they have been in since the spring — i.e., very, very low yields. Commodities are a crazy set of stories within the range of instruments traded around the world. Energy prices are down by more than 20% on the year, while metals like aluminum and copper, as well as agriculture, are ending the high higher by similar percentages. And then there are currencies. The U.S. dollar ended the year at its lowest levels since February 2018 and is closing in on the worst quarterly performance since the third quarter of 2017. These last few days have seen strong performance by the commodity currencies — the Australian, New Zealand and Canadian dollars — reflecting hope for a return of consumer demand in 2021. The British pound is ending the year about 3% above where it started relative to the U.S. dollar, but the story there is fairly remarkable as well. With the trade agreement with the EU signed, tomorrow officially ends the Brexit process. It also starts the process of adjusting to a new paradigm for business and society in Europe. So how do we end this year? It’s hard not to look back on the year with dismay if we are being honest. I heard a podcast earlier this week that reached back to the times following World War II, just as a new Cold War was being started, to get inspiration to look forward. In accepting the 1949 Nobel Prize for Literature, William Faulkner said, “I believe that man will not merely endure: he will prevail. He is immortal, not because he alone among creatures has an inexhaustible voice, but because he has a soul, a spirit capable of compassion and sacrifice and endurance.” Happy New Year all. We’ll see you in 2021.

If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!

Follow City National Bank on social media:

Non-deposit investment products: • Are not FDIC insured, • Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and • Are subject to investment risks, including possible loss of the principal invested. This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.

Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2020 City National Bank – All Rights Reserved. 350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC