Stocks drop as NYC school closure saps sentiment

US stocks slumped as fresh restrictions to curtail the spread of coronavirus overshadowed signs that scientists are making fast progress toward a vaccine. The dollar held near its lowest level in two years. The S&P 500 fell by 1.16% to 3,567.79 while Dow Jones was down 344.93 points (1.16%) to 29,438.42.

US job picture worsens amid latest surge in coronavirus cases

Fewer Americans said they were working as the latest wave of the coronavirus infections surge across the US, according to data released by the Census Bureau. Back-to-back Household Pulse Surveys conducted from mid-October to early November showed that the number of employed Americans declined by about 4.5 million. The figures are a possible sign the labor-market rebound may be losing steam amid a Covid-19 resurgence.

US housing starts increased more than forecast in October

US new home construction rose in October by more than forecast to the fastest pace since February, highlighting a robust residential real estate market that’s helping spur the economy. Residential starts increased 4.9% to a 1.53 million annualized rate from an upwardly revised 1.46 million a month earlier, according to a government report.

ECB wants next stimulus to be judged on quality, not quantity

European Central Bank policy makers are trying to persuade investors not to focus too much on the size of their next dose of monetary stimulus, hoping they will instead look at its design. President Christine Lagarde and colleagues have used a run of public comments to stress that December’s much-anticipated policy decision will aim to cement cheap money for the duration of the economic crisis, achieved through both asset purchases and more loans to banks.

UK inflation pickup leaves rate well below BOE target

The UK inflation rate edged higher in October, boosted by the rising cost of food and clothing. Consumer prices rose 0.7% from a year earlier, up from 0.5% the previous month, the Office for National Statistics said. The core rate, which excludes volatile energy and food prices, increased to 1.5% from 1.3%. Despite the pickup, the headline rate has remained less than half Bank of England’s 2% target since April, underscoring the weakness an economy hit hard by the pandemic.

China’s credit jitters deepen a selloff in government bonds

The credit default shock waves rippling through China are hurting demand for sovereign bonds, with market watchers seeing the slide lasting the rest of 2020. China’s 10-year government notes are set to drop for a seventh month in November, on track for the longest retreat since 2007. The decline has pushed the benchmark yield to 3.32%, set for the highest since May 2019.

Bank of Thailand shifts focus to baht rally, holds on rates

The Bank of Thailand signaled it will focus on tackling a rally in the nation’s currency, while keeping its benchmark interest rate unchanged at 0.5% for a fourth straight meeting to save limited policy space. The bank’s Monetary Policy Committee “expressed concerns over the rapid appreciation of the baht as this affected the fragile economic recovery,” it said.

Oil hits two-month high with vaccine news buoying demand hope

Oil rose to its highest since early September following further progress on a coronavirus vaccine, with investors shrugging off a smaller-than-expected build in US stockpiles. Brent crude for January settlement rose US$0.59 to US$44.34 per barrel.

Source: Affin Hwang Research - 19 Nov 2020