Japanese GDP data surprised on the upside massively - the annualized change for the third quarter rose to 21.4%, up from -28.8% in the second quarter, while analysts had expected 18.9%. The quarterly change jumped from -8.2% to 5%.
Moreover, Chinese data also surpassed estimates, with industrial production, retail sales, and fixed asset investments improving month-on-month.
Meanwhile, one of the largest investment banks, Morgan Stanley, in an outlook for 2021, recommended that investors overweight equities and corporate bonds, citing an expected “V-shaped” economic recovery, greater clarity on Covid-19 vaccines, and continued policy support. As we have previously mentioned those fundamentals, that outlook makes sense to us.
Equities were trading up today, with US indices nearly 1% stronger, despite record new COVID-19 cases and hospitalizations. It looks like investors don't care anymore how the pandemic will continue; the only thing that matters is how much stimulus will be introduced.
The USD slipped, with the dollar index down 0.25% during the morning session, which pushed the EURUSD pair toward the 1.19 threshold and the USDJPY pair toward 104. Metals advanced, and silver is now attacking 25 USD, while gold is trying to get back above the 1,900 USD level.