Demand for Risky Assets Has Been Increased due to the Resumption of COVID-19 Vaccine Trials

The US currency is declining against a basket of currency majors. The US dollar index closed in the red zone (-0.44%) yesterday. News that AstraZeneca has resumed clinical trials of a COVID-19 vaccine after the suspension has boosted demand for risky assets. At the same time, Pfizer and BioNTech SE have offered to extend the trial phase of their vaccine to 44,000 volunteers.

Also, the demand for the US dollar has been declined before the Fed meeting. On September 15-16, a Fed meeting will take place, during which it is assumed that the American Central Bank will keep a "dovish" attitude since the US economy still needs support. The key interest rate is expected to remain unchanged at 0.25% per annum.

The British pound is still under pressure after the EU last week called on the UK to urgently abandon its intentions to violate the terms of the agreement to leave the bloc. However, yesterday British Prime Minister Boris Johnson criticized the EU's actions, having received preliminary approval from Parliament for a plan to violate the agreement on Britain's exit from the bloc. Johnson said it was necessary because the EU did not want to compromise in trade negotiations.

Today, during the Asian trading session, quite optimistic data from China have been published. Thus, fixed asset investments (y/y) decreased by 0.3% in August, while experts forecasted a decline by 0.4%; industrial production (y/y) grew by 5.6% in August instead of 5.1%.

The “black gold” prices are falling due to reduced demand. At the moment, futures for the WTI crude oil are testing the $37.65 mark per barrel. At 23:30 (GMT+3:00), API weekly crude oil stock will be published.

Market indicators

Yesterday, there was the bullish sentiment in the US stock market: #SPY (+1.32%), #DIA (+1.24%), #QQQ (+1.74%).

The 10-year US government bonds yield is consolidating. The indicator has reached 0.67-0.68%.

• - UK labor market data at 09:00 (GMT+3:00);
• - German ZEW economic sentiment index at 12:00 (GMT+3:00).

by JMarkets, 2020.09.15

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.