US virus restrictions dampen vaccine-related optimism, retail sales, Brexit eyed

Here is what you need to know on Tuesday, November 17:

Markets are off the highs and the US dollar is finding its feet as fresh restrictions in various US states counter optimism from the second coronavirus vaccine breakthrough. Optimism on Brexit is boosting the pound and the all-important retail sales are eyed. 

US coronavirus restrictions: California “hit the emergency brake” on its reopening while Iowa and New Jersey slapped new restrictions to curb the spread of coronavirus. Around 148,000 COVID-19 cases were recorded on Monday and hospitalizations topped 73,000, the latter being a new record. 

The US dollar is finding its feet after coming under some pressure and S&P 500 futures are down. On Monday, stocks surged after Moderna reported 94.5% efficacy in its covid vaccine candidate. Moreover, the firm’s immunization doses can withstand higher temperatures for longer, contrary to the Pfizer/BioNTech vaccine. Both pharmaceuticals apply the novel mRNA approach, used also by other immunization efforts in the pipeline. 

Brexit: Ireland’s Prime Minister Micheal Martin said that the “contours of a deal are there” but he is unsure if his British counterpart Boris Johnson is ready to go for one. The Sun, a tabloid, reported that an accord may come shortly. GBP/USD temporarily advanced in response to the headline. Talks continue in Brussels ahead of an EU leader videoconference on Thursday. 

US Retail Sales are set to rise by around 0.5% in October, a relatively moderate pace in comparison to September’s 1.9% leap. Consumption is central to America’s economy. 

See Retail Sales Preview: Will curfews bring down consumer spending?    

Jerome Powell, Chairman of the Federal Reserve, will speak later in the day and may provide hints if the bank is set to expand its bond-buying scheme. The Fed opened the door to more action in its recent rate decision. Powell is likely to call on lawmakers to act. 

President-elect Joe Biden addressed the nation amid rising covid infections and called for an economic relief package. However, officials are busy in the Senate runoff due in January, which determines control of the upper chamber. 

German Chancellor Angela Merkel has failed to reach an agreement with regional leaders on tougher restrictions to curb the disease. Austria announced a three-week national lockdown and also Sweden imposed new restrictions.

Bitcoin is rising, trading closer to $17,000. Citibank’s technical analysts set a target of $318,000. 

See What you need to know about the dollar in the post-vaccine announcement world


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