Amid surging COVID-19 cases and Europe beginning to impose stricter measures, oil is down, gold is recovering some losses, the U.S. dollar is down, and policymakers are debating on the course of action central banks should follow.
Gold & U.S. Dollar
Gold was down on Monday morning in Asia. The shiny metal hit its lowest point in nearly two weeks but the increasing COVID-19 cases in Europe helped the asset recover some losses. The U.S dollar which has an inverse correlation to gold, went up on Monday but fell below the record level it hit on Friday.
Bitcoin
Bitcoin is experiencing a dramatic fall and is trading at $50,692,74 at the time of writing. The drop was triggered by the rejection of VanEck’s proposal for a spot ETF on November 12.
Bitcoin had hit a new all-time high above $69,000 on November 10 after the United States Securities and Exchange Commission’s announcement in early October that they approved ProShare’s Bitcoin ETF.
Oil
Oil dropped on Monday morning in Asia as COVID-19 cases in Europe are soaring causing concern about a possible decrease in fuel demand. Austria is imposing a full lockdown starting today, Monday. Germany could enforce mandatory remote working while employees in Ireland and the Netherlands are working from home if possible.
As U.S. President, Joe Biden, is under pressure to release oil supply from the Strategic Petroleum Reserve (SPR) to help lower increasing oil prices, he extended a request to big oil producing nations including China and Japan to do the same. Fumio Kishida, the prime minister of Japan, implied that he could be following the U.S. request.
October saw oil hitting its highest point since 2014 with the asset showing volatility over the past month. Oil has been volatile despite the OPEC + decision to stick to their plan for a gradual increase in supply.
Inflation Talk
Officials from the U.S. Federal Reserve have been publicly debating about speeding up the asset tapering. Fed Vice Chairman Richard Clarida, Governor Christoper Waller and St. Louis Fed President James Bullard have implied that the agenda for the Central Bank’s December meeting could include accelerating the process.
On the other side of the Atlantic, Jens Weidmann, the president of Bundesbank – the German Federal Bank – warned that inflation could remain above 2% for a period of time and the European Central Bank should not commit to further support for the economy.
What to Watch out for this Week:
Tuesday
Eurozone, U.S. PMI data (Purchasing Managers’ Index)
Wednesday
Reserve Bank of New Zealand rate decision
U.S. FOMC (Federal Open Market Committee) minutes
U.S. Consumer Income
U.S. Wholesale Inventories
U.S. New Home Sales
U.S. GDP
U.S. Initial Jobless Claims
U.S. Durable Goods
Thursday
Bank of England Governor speech