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Here is what you need to know Thursday 10th December:

  • Investors grew discouraged over the halting progress of economic stimulus talks while the economy has been battered from the COVID-19 pandemic and related lockdowns.
  • US Senate Majority Leader Mitch McConnell said lawmakers were still looking for a path toward an agreement on COVID-19 aid, as the US House of Representatives prepared to vote on a one-week funding bill to provide more time to strike a deal. 
  • UK Prime Minister Johnson and EU President von der Leyen are meeting in Brussels tonight and, if progress can be made, the talks will continue in coming days. The latest is that the dinner-meeting is still ongoing.
  • The Bank of Canada left monetary policy unchanged and repeated its forward guidance suggesting little prospect of a rate hike before 2023. Warning that “new waves of infections are expected to set back recoveries in many parts of the world” the BoC said for Canada specifically, that the situation will “weigh on growth in the first quarter of 2021 and contribute to a choppy trajectory until a vaccine is widely available”.
  • In forex, USD/JPY showed some signs of life as the DXY continued to recover. AUD/USD bulls took the pair to a fresh 2.5 year high but retreated ahead of 0.7500. GBP bulls were tripping up as the 10-DMA was tested, bracing for outcomes of the Brexit talks. USD/CAD found support building on multiple downside tests with eyes on 10-DMA resistance at 1.2895. EUR/USD was scraping along five-day lows awaiting the ECB today, outcomes of Brexit discussions and signs of a US relief bill which have all dampened risk appetite. 
  • The US 10-year yield lifted 3.1bps to 94.9 bps. Oil lost ground on strong inventory gains, with WTI up 0.2% to USD45.7/bbl. Gold lost 1.3% to $1,834.4/oz.
  • Cryptocurrencies posted recoveries with BTC/USD up some 1.5%.