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  • richard evans

Covid concerns grow amid unrest across EU

Good morning

A lot of Covid headlines as cases rise sharply across Europe, some countries such as Austria go into full lockdown while announcing mandatory vaccinations, while Netherlands and Belgium saw protests and riots over new restrictions. The rise in infection rates should not be a surprise, it has been coming for a while now, Merkel warned last week that they are being hit by a fourth wave and are themselves considering mandatory vaccinations. It took a while for EUR to be hit, EURUSD now at 1.1270 and EURGBP at 0.8390 (GBPEUR 1.1920). GBPUSD at 1.3435.

EUs Sefcovic has accused his UK counterpart Frost of political posturing. Frost had called for more urgency from EU over NI protocol talks, Sefcovic is not happy and suggests he is the one who pushes for urgent solutions. Elsewhere in EU, the Russian troop build-up on the Ukraine border suggests Russia are considering an invasion of their neighbour, according to US intelligence.

Feds Clarida was hawkish Friday, saying Fed should discuss pace of tapering at its Dec meeting, while Feds Waller also said he favours a faster taper. We still haven’t heard from Biden over his Fed chair nomination but surely we will know early this week. Some thinking that if Biden chooses Powell it will be dollar positive, and initially dollar negative if he goes for Brainard although I’d imagine we’d see dollar buyers on decent dips.

China keep rates on hold overnight but there has been some comment from China over the level of Yuan. China’s FX committee has pushed banks to limit speculation after Yuans recent gains. USDCNY has fallen in recent months despite USD making gains elsewhere, and China have so far been pretty quiet but I wonder if we’ll see more talk from China over Yuen levels in the coming days and weeks.

US thanksgiving later this week which generally leads to a long weekend. Some are saying there is already a holiday feel to the week, but that’s a bit premature in my eyes. Lets get the Fed nominations out of the way first.

A quick word on sport. Well done to England for beating South Africa at rugby over the weekend. In football, Spurs managed a victory at the weekend despite going a goal down. They looked pretty awful in the first half but upped their game for the second half. Still a bit of a surprise how Leeds can be just one place above the relegation zone with the level of football they play. Speaking of levels of football, my U15s had yet another weekend of success, rolling out 5-2 winners in a match that was tighter than the scoreline suggests. A superb performance against a well-disciplined opposition. I know what you are all thinking. Have I had the call from Old Trafford yet? No, not yet……..

- 13.30 US Chicago fed national activity index

- 15.00 US existing home sales

- 15.00 EU consumer confidence

- 21.45 NZ retail sales

- 22.00 AUS commonwealth bank PMIs

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