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Daily-Market-Update Page 1 Date 16-Nov-2020 Daily-Market-Update Page 1 Date 16-Nov-2020 Overnight/Asia NEWS Asian stocks and U.S. futures climbed on Monday, buoyed by positive sentiment on regional trade and signs of opposition to a national American lockdown despite surging virus cases. The dollar retreated. The Asian benchmark was on track for a record close, with Japan and South Korea outperforming. A slew of Asia-Pacific nations on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the world’s population and gross domestic product. In Australia, share trading was paused due to a market data issue. S&P 500 futures extended last week’s advance after advisers to President-elect Joe Biden said they opposed a nationwide U.S. lockdown. Oil pushed higher and Treasuries were steady. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs. The tech-heavy Nasdaq 100 underperformed amid the rotation to economically sensitive industries. Global stocks have recovered to pre-pandemic highs after optimism about a vaccine last week drove a rotation into value and cyclical sectors, and more defensive industries underperformed. Still, concerns about a sustainable economic recovery persist amid a flare-up in cases around the world. China remains a bright spot. Data showed the country’s economic recovery strengthened in October, with consumer spending picking up steadily and industrial production and investment rising faster than expected. The nation’s central bank added funds to the financial system to support growth. The pandemic continues to escalate in regions such as Europe and the U.S. American coronavirus cases have topped 11 million. Germany must live with “considerable restrictions” against the spread of Covid-19 for at least the next four to five months, the its economy minister said. “We do see a positive stream of news going forward,” Sean Fenton, chief investment officer at Sage Capital Pty in Sydney, said on Bloomberg TV. “The market looking forward towards eventual reopenings, real yields probably bottoming out, and cyclical and value stocks doing better, I think that’s a momentum that will be carried through at least over the next three to six months if not longer.” Meanwhile, U.S. President Donald Trump plans several new hard-line moves against China in the remaining weeks of his term, according to Axios. Trump showed few signs of conceding the presidential election to Biden, while also hardly acting as if he was preparing for a second term. Asia Pacific nations on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the world’s population and gross domestic product. Here are some events to watch out for this week: Brexit talks look set to continue as the U.K. and EU approach the latest deadline, OPEC+ Joint Ministerial Monitoring Committee meets Tuesday, U.S. retail sales due Tuesday and Bank Indonesia rate decision Thursday. Commodities Overnight News Oil prices edged up in early Asian trade on Monday, recouping some losses from the previous session as hopes that OPEC+ will continue to curb output offset concerns of weaker fuel demand amid rising COVID-19 cases and higher production from Libya. Brent crude futures for January rose 27 cents, or 0.6%, to $43.05 a barrel by 0043 GMT while U.S. West Texas Intermediate crude for December was at $40.48 a barrel, up 35 cents, or 0.9%.Both contracts gained more than 8% last week on hopes of a COVID-19 vaccine and that the Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia will maintain lower output next year to support prices.The group, also known as OPEC+, has been cutting production by about 7.7 million barrels per day, with a compliance rate seen at 101% in October, and had planned to increase output by 2 million bpd from January. OPEC+ is due to hold a ministerial committee meeting on Tuesday which could recommend changes to production quotas when all the ministers meet on Nov. 30 and Dec. 1.However, the speedy recovery of oil production in Libya, an OPEC member, back to above 1.2 million bpd presents a challenge to OPEC+ cuts while a slowdown in traffic across Europe and the United States dampened fuel demand recovery hopes this winter. People movement on highways in the United States was also slowing based on vehicle mileage data despite authorities’ reluctance to implement new restrictions, they added.While fuel demand is slowing, Baker Hughes’ data showed that U.S. oil and natural gas rig count rose last week to their highest since May as producers, spurred by higher crude prices, return to the wellpad.ANZ analysts expect the oil surplus to increase to between 1.5 million and 3 million bpd in the first half next year with a vaccine only boosting demand in the second half.“European motorway traffic is down almost 50% in recent weeks in some countries as lockdown measures are increased,” ANZ analysts said. Local and GCC Markets South Korea’s crude imports from Saudi Arabia climbed 33% y/y to 4.1m tons in October, according to data posted on the Korea Customs Service website. That’s the highest monthly purchase since July. The country’s overall crude imports in Oct. were at 11.1m tons, up 0.5% from a year ago. LNG imports rose 21% y/y to 3.9m tons, highest since February. The bonds of OPEC’s largest crude producer have shrugged off historically low energy prices and the coronavirus pandemic this year. Now investors are pondering how long that outperformance will last with Joe Biden in the White House. Saudi Arabia’s U.S. dollar-denominated debt has handed investors an average return of about 10% this year through Nov. 13, the second-best performance among developing nations. Saudi lenders boosted the main index in Riyadh to the biggest gain in the Middle East amid bets that a recovery in the kingdom’s economy will help earnings next year. The Tadawul Banks Index, composed of 12 banking shares, advanced 0.7% on Sunday to end at the highest level since Feb. 23. Al Rajhi Bank, Bank AlBilad, Samba Financial Group and Saudi British Bank climbed between 0.7% and 2.1%, versus a 0.8% increase for the Tadawul All Share Index. Kuwait Petroleum offered to sell 40k tons of jet fuel for Dec. 5-6 loading, according to a tender document. Interest Rate Equity Index 3M 6M 12M USD IRS Dow J Tokyo BSE MSM Tadawul USD Libor 0.22200 0.24600 0.33938 3 Y 5 Y 10 Y Levels 29,080.17 25,894.29 43,443.00 3,641.48 8,501.58 EUR Libor -0.53857 -0.51214 -0.45586 0.3025 0.4508 0.854 Change 399.64 504.84 194.98 13.34 66.68 Deposit Rates Commodities 1M 3M 6M 1Y 2Y 3Y Metals Price Metals Price 0.75% 1.25% 1.75% 2.25% 2.50% 2.75% USD Gold 1896.18 Brent 43.20 Oman 1.50% 1.75% 2.25% 3.00% 3.50% 3.25% OMR Sing Jet Kero 41.87 Crude 42.95 *Above rates are for retail customers. Bank Dhofar |Caveat/Waiver: The information contained herein does not constitute the provision of investment advice. It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the financial instruments mentioned. There are no representations, guarantees or warranties are made by Bank Dhofar with regard to accuracy, completeness or suitability of the data. The opinions and estimates contained herein reflect the current market conditions and are on the best effort basis please consult your financial consultant for before you embark on the same. Views and information are subject to change without notice. Daily Market Update Page 2 Date 16-Nov-2020 Trade of the Day Chart attached GBP/USD 1.3227 Currency pair completes the trading week near the 1.3177 area. The pair continues to move within the framework of growth. Moving averages indicate a bullish trend. Prices moved up from the area between the signal lines, indicating pressure from buyers and a potential continuation of the rise in the British Pound against the US Dollar at current levels. At this point, we should expect an attempt to grow and test the resistance area near the level of 1.3335. Further, the rebound and the beginning of the fall in the Pound/Dollar quotes to the area below the level of 1.2005. An additional signal in favor of the fall of the British Pound will be a test of the trend resistance line on the relative strength index (RSI). The second signal will be a bounce off the top of the Expanding Formation. Cancellation of the option to drop the GBP/USD pair for the current trading week on will be a strong growth and a breakdown of the 1.3755 area. Currency View EURUSD(1.1851)Currency pair completes the trading week near the 1.1820 area. The pair continues to move within the framework of the growth and the rising channel. Moving averages indicate a bullish trend for the pair. Prices again bounced off the area between the signal lines, which indicates pressure from buyers of the European currency and the likely continuation of growth from the current levels. At the moment, we should expect an attempt to develop a fall and a test of the support area near the level of 1.1695.
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