Open: London Session | Forex, Metals, Oil, Agriculture December 18, 2020



Since the MSCI Emerging Markets equity index began in 1988, its performance relative to the MSCI World developed markets gauge has moved reliably in line with the dollar. So far, emerging markets haven t picked up as much, in relative terms, as might be expected after a dollar tumble on this scale:This leaves emerging markets finely poised. A strong dollar, compared to other developed market currencies, means weak emerging markets relative to the developed world, and vice versa.
Ares Commercial Real Estate Corporation (ACRE) is an mREIT that was established in 2011, and manages a nearly $2B dollar portfolio of real estate loans. Another pharma giant, Eli Lilly, followed in with a billion-dollar offer to buy gene therapy biotech, Prevail Therapeutics. There have been several small ticket acquisitions in 2020 including some billion-dollar offers.


Some see it, alongside copper, as a risk-on growth proxy investment.


This was related to a drop in oil prices (an oil price bubble popped in 2008, and West Texas Intermediate futures prices briefly went negative this year). Oil prices are poised for a seventh weekly gain as lawmakers in the U.S. work toward a stimulus package that could help to boost demand. More likely, after burning the midnight oil, he will have to accept a compromise at the last minute.

United States

Looking ahead to 2021, we believe the Fed will eventually need to provide more detailed guidance on its reaction function for asset purchases. According to the Fed statement, the current pace of asset purchases will remain in place until “substantial further progress” has been made toward achieving the Fed’s dual mandate objective. If unemployment and growth were to rebound much faster than expected but inflation remain low, for example, it’s unclear if or how the Fed would adjust purchases.
Second, the Fed’s messaging also likely reflects a range in views on the committee about the trade-off between the potential benefits and risks of asset purchases. Instead, the Fed is looking to fiscal policy to help the U.S. economy bridge the gap from the current public health crisis to an improving outlook for 2021. With interest rates low and financial conditions easy, Fed officials did not see a need to add even more support. The Fed revised its projections significantly in light of the faster-than-expected recovery to date, and the path going forward remains unclear given the unusual nature of this economic crisis.
The limited reaction in U.S. Treasury markets to the new FOMC statement suggests the Fed has provided enough clarity – for now. The figure above shows the 10-year breakeven inflation rate (based on the Fed H.15 report). Today, Wall Street continues to use Zacks research including the Zacks Rank and Zacks Equity Research, which combines the best of quantitative and qualitative analysis.


Chances are the new year will begin with a stimulus deal in Washington, a Brexit agreement and a vaccination campaign under way. It has rather cheered me up.I was struck by a line near the end of the latest story on the Brexit negotiations in the Financial Times. Tension in Brexit talks increases, governments push for vaccines and a major cybersecurity breach.