MTS Help Center

Gold set for worst month since 2016 amid vaccine optimism

·         Gold dropped to a five-month low on Monday and was on track for its worst month in four years as optimism over a swift vaccine-fuelled economic recovery dented allure for safe havens.

·         Spot gold was down 0.8% at $1,773.56 per ounce, having earlier hit its lowest level since July 2 at $1,764.29, and has shed 5.6% so far this month. U.S. gold futures dropped 0.4% to $1,780.10 per ounce.

·         “They (investors) are abandoning gold because they feel that the vaccine is going to open up the markets at some point and it looks like the transition is going to be orderly,” said George Gero, managing director at RBC Wealth Management. “It is going to be a long road ahead for gold because there does not seem to be any need for the haven at this time.”

·         Investors are now eyeing a congressional testimony by U.S. Federal Reserve Chairman Jerome Powell this week.

·         “Traders and investors are exhibiting little risk aversion recently, amid no geopolitical hotspots at present, COVID-19 vaccine hopes and an apparent smoother transition of U.S. presidential duties seen,” Kitco Metals senior analyst Jim Wyckoff said in a note.

 

“That’s all bearish for the safe-haven metals.”

·         Silver fell 1.6% to $22.34 an ounce, on track for a 5.5% fall on a monthly basis.

·         Platinum rose 1.3% to $975.84, while palladium slipped 0.7% to $2,407.51.

 

·         Dollar rises from more than two-year low as U.S. stocks drop

The dollar rallied from its lowest level in 2-1/2 years on Monday, as broad risk sentiment soured again and shares on Wall Street fell, with investors disheartened by weakening U.S. economic data and the absence of any traction on another stimulus package.

  

·         U.S. bond volatility players eye 2021 inflation bump

After a decade of central bank bond buying, fund managers have begun to wonder if there is again money to be made in betting or hedging against volatility in the bond market caused by an economic recovery next year.

The ICE BofA MOVE Index, which tracks expectations of volatility in Treasuries, is again languishing near all-time lows after a spike in March was quelled by U.S. Federal Reserve intervention.

But a handful of fund managers, and some major banks, warn of the risk of a spike in inflation next year that could spur losses for bond funds and more volatility before the Fed steps back in, or eventually even change the central bank’s stance.

 

·         Coronavirus Updates:

·         21 states hit record highs in hospitalizations on Sunday

Dr. Anthony Fauci, the nation’s top infectious disease expert, said on Sunday that current restrictions and travel advisories will be necessary for the Christmas holiday season to stem the tide.

 

·         Moderna says new data shows Covid vaccine is more than 94% effective, plans to ask FDA for emergency clearance later Monday

The FDA’s review of Moderna’s vaccine is expected to take a few weeks. The agency will likely schedule an advisory committee meeting to review the vaccine on Dec. 17, Moderna said. It has already initiated rolling submissions with several regulatory agencies around the world, including the European Medicines Agency.

 

·         Goldman Sachs predicts how quickly coronavirus vaccines will be rolled out worldwide

Investment bank Goldman Sachs has forecast that more than 70% of people in developed markets will be vaccinated against the coronavirus by fall 2021.

In a note published last week, Goldman Economists Daan Struyven and Sid Bhushan laid out a vaccine timeline using a combination of supply estimates (using data from leading vaccine developers Pfizer-BioNTech, Moderna, AstraZeneca, Novavax, and Johnson & Johnson) and demand, using consumer survey data.

They said they expected the first doses of coronavirus vaccines to go to the most high-risk groups of people in the U.S. from mid-December onwards.

Vaccine approval and rollout would lead to “significant public health benefits” from the first quarter of next year, the economists added, with half of the population of the U.S. and Canada likely to be vaccinated in April.

Goldman expects the U.S. Food and Drug Administration to approve the Pfizer-BioNTech and Moderna vaccines in the coming weeks, with an FDA advisory committee meeting on Dec. 10 and possibly Dec. 17.

 

·         Gottlieb says up to 30% of Americans may get Covid by year-end

Up to one-third of the American population could be infected by the coronavirus by the end of this year, former FDA chief Dr. Scott Gottlieb told CNBC.

“We’re going to probably have by the end of this year, 30% of the U.S. population infected,” Gottlieb said on “Squawk Box,” while noting that level of prior infections could have implications for slowing the epidemic early next year as vaccines for Covid-19 potentially come onto the market.

 

·         Vaccines may be ready for Christmas as U.S. braces for post-Thanksgiving virus surge

After a Thanksgiving weekend when the number of people traveling through U.S. airports reached its highest since mid-March, a top government official said on Monday some Americans could begin receiving coronavirus vaccinations before Christmas.

U.S. Health Secretary Alex Azar said Pfizer Inc’s COVID-19 vaccine could be authorized and shipped within days of a Dec. 10 meeting of outside advisers to the Food and Drug Administration tasked with reviewing trial data and recommending whether it warrants approval.

A vaccine from Moderna Inc could follow a week later, he said, after the company announced on Monday it would apply for U.S. and European emergency authorization. Final trial data showed the vaccine to be 94.1% effective at preventing COVID-19, comparable with Pfizer’s results.

“So we could be seeing both of these vaccines out and getting into people’s arms before Christmas,” Azar said on CBS’ “This Morning.”

 

·         FAA says ‘first mass air shipment’ of Pfizer’s Covid vaccine has shipped

The Federal Aviation Administration said it supported the “first mass air shipment” of coronavirus vaccines last week. A United Airlines jetliner carrying Pfizer’s Covid-19 vaccine arrived in Chicago on Friday, according to people familiar with the matter.

The step is a first toward the widespread distribution of a vaccine as manufacturers await government approvals.

 

·         CEO of Montana hospital, which lost a doctor to Covid, says he expects Thanksgiving-related surge

The intensifying outbreak of Covid-19 also has taken a personal toll on the staff of the health system, Ellner said.

“The most sobering thing that we saw, actually this past weekend, was unfortunately that we lost one of our physicians to Covid, so this is really hitting our workforce, our Billings Clinic family pretty hard,” he said.

 

·         Air travel hits pandemic record over Thanksgiving but still down from last year

Not all travelers heeded government health official recommendations to avoid air travel over Thanksgiving.

The Transportation Security Administration screened close to 1.2 million people on Sunday, the most since mid-March but still down by nearly 60% from last year’s levels.

·         Congress returns facing government shutdown deadline, calls for stimulus amid coronavirus surge

Congress comes back to Washington this week with two thorny issues to resolve before the end of the year.

Lawmakers need to pass a spending bill by Dec. 11 to prevent a government shutdown. Meanwhile, they will have to decide whether to approve another coronavirus relief bill as rampant infections stress hospitals and trip up the U.S. economic recovery.

The challenges will test a divided Capitol’s capacity to govern after months of gridlock fueled in part by a contentious 2020 election. Congress’ ability to pass legislation this month will shape the federal government and private sector’s power to reduce the damage caused by the pandemic in the coming months.

 

Congress returns to a coronavirus stimulus stalemate amid infection surge

Congress comes back from Thanksgiving in the same place it has been for months: far from a coronavirus stimulus agreement with no clear resolution in sight.

Republicans and Democrats have not discussed a relief deal since the 2020 election. Senate Majority Leader Mitch McConnell has called for roughly $500 billion legislation, while House Speaker Nancy Pelosi has insisted on a bill that costs at least $2.2 trillion.

Calls for new aid have increased as Covid-19 infections and hospitalizations surge around the country. Expanded unemployment insurance, a federal student loan moratorium and some protections from eviction will expire at the end of the year.

Lawmakers face a chaotic December. They also need to approve a funding bill to avoid a government shutdown by Dec. 11.

 

·         Powell stresses importance of lending programs, calls economic outlook ‘extraordinarily uncertain’

Federal Reserve Chairman Jerome Powell emphasized the importance of the lending programs it has deployed during the coronavirus pandemic, telling senators in testimony to be delivered Tuesday that they’ve been integral in keeping the economic fallout from being worse.

Many of the key programs that the central bank has used since March are expiring at the end of the year, and the Fed will be forced to return the funding that supports them.

 

·         Treasury's Mnuchin urges Congress to tap unused CARES Act funds for COVID relief

U.S. Treasury Secretary Steven Mnuchin on Monday urged Congress to tap into $455 billion of unused emergency relief funds to fuel an additional, targeted round of pandemic economic assistance for American households and businesses.

“Based on recent economic data, I continue to believe that a targeted fiscal package is the most appropriate federal response,” Mnuchin said in prepared testimony to the Senate Banking Committee released ahead of a hearing scheduled for Tuesday. Mnuchin will appear alongside Federal Reserve Chair Jerome Powell.

 

·         IMF warns of ‘scarring effects’ that could hit growth in the euro zone

This second wave of the pandemic means that the better-than-expected economic growth seen in the third quarter of this year is likely to be followed by weaker growth in the final three months of the year.

And the IMF warned that unless the situation changed “significantly” it would mean weaker growth for the first three months of 2021 than it had previously forecast. 

 

Stimulus measures

The fund also said that hurdles in finalizing the European Union’s 750 billion euros ($900 billion) recovery package, and distributing the funds, needed to be overcome as further delays would damage the region’s recovery prospects. And it warned that further stimulus would likely be needed from the central bank.

“Expanding asset purchases will be the first line of defense, but other options—including further relaxation of Targeted Longer-Term Refinancing Operations’ terms and a deposit rate cut—should also be considered,” it wrote.

And with regards to national stimulus measures, the IMF said that, “with the ongoing second wave, national fiscal policies will likely need to provide broadbased support for longer than initially envisioned.”

Ongoing negotiations over the U.K.’s future relationship with the EU and the potential escalation of trade tensions between the two, could add to uncertainty, the IMF warned.

 

·         ABN AMRO CFO expects ‘gradual recovery’ through 2024

Clifford Abrahams, CFO at ABN AMRO, discusses the bank’s investor update and his outlook, saying the economy is “still tough.”

 

·         Arizona and Wisconsin officially declare Biden beat Trump in those states

 

·         Brexit trade talks enter ‘last leg’ with no-deal deadline just weeks away

Both sides need to reach new trade arrangements and rectify them in their respective parliaments before the end of the year. Failure to achieve that could lead to a no-deal scenario — higher costs and barriers for exporters on both sides.

A deal could fall apart without fisheries

 

·         China’s wine tariffs will have a ‘devastating impact’ on small Australian producers, trade group says

China’s commerce ministry on Friday announced preliminary anti-dumping duties ranging from 107% to 212% on Australian bottled wine imports, which went into effect the following day. That follows China’s anti-dumping probe into wine imports from Australia earlier this year.

The move went into effect a day later on Nov. 28.

China is the top wine export destination for Australia and accounted for 39% of total exports as at year ending Sept. 2020, according to Wine Australia.

Reference: CNBC, Reuters, Worldometers