US stocks rise to record; Treasuries advance

US stocks rose in to a record in thin post-holiday volume as investors assessed valuations with pandemic still raging in parts of Europe and the US. The S&P 500 rose by 0.24% to 3,638.35 while Dow Jones was up 37.90 points (0.13%) to 29,910.37.

BOE’s Haldane says QE size challenges central bank independence

The extraordinary expansion in central banks’ balance sheets over the past decade poses a challenge to the independence of monetary policy, Bank of England (BOE) Chief Economist Andy Haldane said. Underscoring the scale of the BOE’s response to the coronavirus pandemic, Haldane said the size of the institution’s bond holdings will be close to 50% of the UK’s economic output and outstanding debt stock one its current asset-purchase program is concluded.

Euro-area economic confidence slumps amid new virus restrictions

Economic confidence in the euro area fell sharply in November, the first deterioration in seven months, after governments imposed new restrictions to halt the spread of the coronavirus. A European Commission sentiment index dropped to 87.6 from 91.1 the previous month, with retailers, services providers and consumers particularly pessimistic. An indicator for employment expectations declined for a second month.

Germany lifts 2021 debt to US$215bn to fund virus aid

Germany’s federal government will raise new borrowing to just under 180bn euros (US$215bn) next year to help fund spending to offset the impact of the coronavirus pandemic. The finance plan for 2021 agreed Friday by lawmakers from Chancellor Angela Merkel’s CDU/CSU bloc and their SPD coalition partners foresees new debt of 179.8bn euros, almost double the amount initially budgeted.

India enters recession as virus pummels No. 3 Asian economy

India entered an unprecedented recession with the economy contracting in the three months through September due to the lingering effects of lockdowns to contain the Covid-19 outbreak. Gross domestic product declined 7.5% last quarter from a year ago, the Statistics Ministry said. That was a marked improvement from a record 24% contraction the previous quarter.

China should further open up finance sector, PBOC official says

China’s finance sector should open up further to support the “dual circulation” economic strategy and mitigate risks in the industry, a central bank official said. More liberalization in the financial sector would provide extra support to the real economy, according to Liu Guiping, vice governor of the People’s Bank of China (PBOC). China’s “dual circulation” development strategy is one in which the domestic market becomes the main growth driver, supplemented by international demand.

Vietnam inflation cools in November to slowest this year

Vietnam reported its slowest inflation this year while exports rose in November even as the coronavirus pandemic continues to hinder trade activity, according to the General Statistics Office. Consumer price gains slowed for a fourth month to 1.48% yoy in November on declines in fuel, travel and transportation costs, data from the statistics office showed. Trade surplus was estimated to have narrowed to US$600mn this month, it said.

Oil gains for fourth straight week ahead of OPEC+ output meeting

Oil rose for a fourth straight week, buoyed by optimism over Covid-19 vaccine progress ahead of an OPEC+ ministerial gathering next week. Brent crude for January settlement gained US$0.38 to US$48.18 per barrel.

Source: Affin Hwang Research - 30 Nov 2020