The key theme of today is the PMI reports released from several regions. First of all, Germany published its own flash PMIs. While the manufacturing and composite data were better than expected, the services report (46.2) suffered a worse drop than expected. As proven in the past months, the services sector is the one most affected by the coronavirus pandemic, so a decline there is unavoidable during lockdowns.
The eurozone-wide composite PMI is also worse than the forecast at 45.1 due to the anti-Covid-19 measures across the European Union.
The PMIs were slightly better in the United Kingdom, with all three reports beating the forecasts. Still, the services PMI dropped to 45.8, which still indicates a contraction in the economy.
The United States will publish its manufacturing PMI report later today, but not the services or the composite ones.
Some good news is also on the radar today. France is preparing to ease out of the current lockdown, at least as far as businesses are concerned, which can help it avoid more damage to its economy. The United Kingdom is reportedly getting ready to do the same at the end of the month.
In addition, AstraZeneca became the third company to confirm its Covid-19 vaccine has proven 90% effective during the third stage of clinical trials. Between AstraZeneca, Pfizer, and Moderna, the world now has three vaccines to choose from, which is improving the odds of supplying more and more countries with medicine to fight the coronavirus.
The overall optimism about defeating the coronavirus pandemic in the coming months and the global economy gradually going back to normal is driving risk appetite today, which is boosting the currencies of emerging markets and suppressing the US dollar and Japanese yen, investors’ top picks for safe investment.
There was one other source of optimism, this time from the United States, where the majority of Trump’s lawsuits surrounding the election have now officially been put to rest, including the most important one in Pennsylvania. This is increasing the chances that Joe Biden’s confirmation as president will happen as scheduled next month when state officials certify the final election results.
