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Here is what you need to know on Tuesday, December 1

Markets have resumed their gains and the dollar is on the back foot once again as the dust settles from end-of-month flows. Optimism about vaccines and Brexit counter concerns from Powell and Yellen about the US economy. 

New month: November ended with a drop in stocks, correcting only a fraction of the considerable gains recorded during the month. The US dollar bounced back on Monday. After the dust settled, the greenback is on the back foot, equities are upbeat and also gold is edging higher toward $1,800.

GBP/USD has resumed its gains within the range amid upbeat comments about Brexit talks. Negotiators continue talks in London and strive to reach a deal this week. Fisheries and a level-playing field remain the thorny issues. 

EUR/USD is trading above 1.1950 after touching the 1.20 level on Monday. The preliminary November Consumer Price Index figures for the eurozone are set to show subdued inflation after German statistics fell short of estimates.

Vaccine: Moderna completed its COVID-19 immunization Phase 3 trial, confirming around 94% efficacy. The firm announced it submitted an application for emergency usage and a hearing is due on December 17. The Pfizer/BioNTech vaccine may be approved in the UK in the next few days and in the US next week. Another effort from Novavax is also gaining traction. The news underpins gains. 

Jerome Powell, Chairman of the Federal Reserve expressed concern about the current spread of the virus in prepared comments ahead of Tuesday’s testimony. While he committed to supporting the economy, Powell did not hint if additional bond-buying will be announced later this month.

See Powell’s CARES Testimony Preview: A little optimism might help

Janet Yellen, Powell’s predecessor at the Fed, was officially nominated as President-elect Joe Biden’s Treasury Secretary. In an initial reaction, she echoed worries about the suffering in the months ahead but vowed to keep the American Dream alive. The most recent figures show yet another record in coronavirus hospitalizations, above 96,000. 

AUD/USD has resumed its gains amid US dollar weakness and on the background of the Reserve Bank of Australia’s rate decision. The RBA left interest rates unchanged at 0.1% as expected. 

The US ISM Manufacturing Purchasing Managers’ Index is set to edge down from the highs but remains on solid ground. The forward-looking indicator serves as a hint toward Friday’s Nonfarm Payrolls report. 

See US ISM Manufacturing PMI Preview: With a tablespoon of salt

The Chinese Caixin Manufacturing PMI and a parallel figure from Japan both beat estimates, adding to the upbeat mood. Final industrial sector surveys are due out for the eurozone and the UK. 

WTI Crude Oil is battling the $45 level after OPEC+ members failed to reach an agreement on extending production cuts and are set to extend talks in the next few days.

Bitcoin is consolidating its gains above $19,000 after flirting with all-time highs on Monday, hitting records on some exchanges but not on others. Ethereum and XRP remain at the top of their recent trading ranges. 

More Markets return to normal, and traders may be loving it