24 Nov

Pandemic Hits the Eurozone Economic Activity

November 24, 2020

by JustForex

The bloc’s economy is tending to its first double recession in nearly a decade, and the Purchasing Managers’ Index (PMI) published on Monday has confirmed it. Analysts say the Eurozone economy has plunged into severe recession again in November amid renewed efforts to prevent the growing wave of COVID-19 infections. This data increases the likelihood that the Eurozone GDP will decrease again in the fourth quarter.

UK economic activity has reduced in November as a new wave of coronavirus restrictions hit the service industry, but news of possible vaccines has brought hopes for 2021.

The UK economy is also expected to decrease in the fourth quarter after Prime Minister Boris Johnson introduced a four-week lockdown for the UK.

In contrast to Europe, in the United States, economic activity in November grew at the fastest pace for over five years driven by the highest production growth since September 2014.

Based on this data, we recommend trading currency pairs with EUR, GBP more conservatively, fixing positions at the nearest levels and considering USD purchases.

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Today, oil prices are rising on increased optimism about energy demand amid the success of several pharmaceutical companies in developing vaccines against COVID-19.

WTI crude oil prices are being traded at $43.25.

Market indicators

US indices gained support at the end of the trading session after reports that President-elect Joe Biden may nominate former Federal Reserve Chairman Janet Yellen for the post of Treasury chief. Biden’s headquarters confirmed this information. The Dow Jones rose by 1.12% to 29.591.27 points, the S&P 500 rose by 0.56% to 3.577.59 points, and the Nasdaq rose by 0.22% to 11.880.634 points.

The dollar index increases to the level of 92.43 amid positive data on US economic activity.

10-year government bonds yield is still stable at 0.86%.

It is worth paying attention to the news feed for today. At this time, we recommend limiting your risks in positions.

The news feed for 2020.11.24:
  • – German GDP at 9:00 (GMT+2);
  • – German business climate index at 11:00 (GMT+2);
  • – Speech by ECB President Lagarde at 16:00 (GMT+2);
  • – US consumer confidence index at 17:00 (GMT+2);
  • – UK autumn forecast statement.

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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