A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
Biotech to the Rescue
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David Atkinson Foreign Exchange Sales Manager
The back half of this week has been fairly quiet compared to action we saw last week and earlier this week. The U.S. dollar is generally stable, with only the Turkish lira making anything like a significant move against the greenback. The Turkish lira has been the currency story of the week with few other currency stories to tell.
Global equities, bonds and commodity prices are likewise within tight ranges today. The U.S. Consumer Price Index for October came in unchanged from September, which is below expectations for a slight rise. There was some positive data coming out of the weekly jobless claims series. Sticking with U.S. data, applications for state unemployment benefits fell by the most in five weeks to 709,000. Economists had expected the number to be 731,000 for the week ending Nov. 7. Continuing claims fell by 436,000 to 6.79 million for the week ending Oct. 31.
You have to admit we have really redefined the term “good news” here. These initial claims numbers are more than three times the kind of data we would get before the pandemic. But it is good news to see a trend that seems to be holding for now, particularly as coronavirus cases are spiking. Former Food and Drug Administration Commissioner Dr. Scott Gottlieb noted this morning that a key characteristic of this resurgence is that it is fairly evenly spread over the country. That has a lot of implications. You tend to not see the stress on any one area’s hospital system, but the levels are certainly headed for that kind of pressure. We also will not have the advantage of being able to move medical personnel around the country to help with the hot spots with a lot of infections spread out around the country.
Contrasting with that is the good news we are seeing on vaccines and treatments. According to reports, the Moderna vaccine has enough infections in its control group to estimate an efficacy rate. Dr. Gottlieb said this morning that anything in the 75% area or higher would be good news. Since these vaccines are using similar platforms, it is reasonable to expect something positive there. Dr. Anthony Fauci, speaking at an event in the U.K., said that he expects the pandemic will not be around for a lot longer due to the progress on vaccines, while he emphasized the need to maintain health measures in the meantime.
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