Risk Appetites Stall Ahead Of The US Thanksgiving Holiday

Overview: The global equity rally appears to be stalling after the US markets rallied strongly yesterday. Chinese, Taiwan, Korean, and Indian indices fell, and the MSCI Asia Pacific Index appears to have posted only its second loss this month. European shares are narrowly mixed, leaving the Dow Jones Stoxx 600 little changed.US equities are struggling to sustain upside momentum. The bond market is quiet.US and European yields are a little softer, leaving the 10-year Treasury around 0.87%. Note that Italian, Spanish, and Portuguese benchmark yields are setting new record lows today. Also, a premium over the US is beginning to build in Australia and New Zealand. The dollar is mostly higher in the foreign exchange market. Yesterday's losses were initially extended, with the euro climbing to $1.1930 and the Australian dollar near $0.7375 before the beleaguered greenback bounced back. The Scandis retain their strength, while the dollar-bloc and the Swiss franc see yesterday's gains pared. Among emerging market currencies, the Turkish lira, the Korean won, and the Chinese yuan is the strongest. In contrast, eastern and central European currencies are the laggards, leaving the JP Morgan Emerging Markets Currency Index little changed on the day. Gold held above $1800 and consolidated yesterday's sharp decline, where it came within a whisker of the 200-day moving average. Oil is extending its push higher for a fourth consecutive session. The January WTI contract pushed above $45 a barrel for the first time in eight months. 

Asia Pacific

The emergence of China is being demonstrated on two fronts.  First, Sinopharm is seeking approval for its coronavirus vaccine. With the other vaccine candidates, like Pfizer's, Moderna's, and AstraZeneca's, the early results have been announced. Less is known about Sinopharm's vaccine. It illustrates the challenge. While China has achieved a certain level of technical competence, the lack of transparency limits its international recognition. China's second achievement is unfolding. This week, it has launched a crewless rocket that will go to the moon, drill a hole in an unexplored part of the moon, and bring rocks back to earth for further study. Only the US and USSR had achieved this previously.  

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Read more by Marc on his site Marc to Market.

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