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Germany

German parties that are in discussions to form a government have stated that an announcement will be made around 1400 GMT.
Coalition discussions between the SPD, Greens, and FDP – dubbed the “traffic light” alliance – have been ongoing for some days now.
Olaf Scholz appears to be Germany’s next chancellor, and it will be fascinating to watch how thorough the parties’ agreement will be in the future.

France

France’s Le Maire claims that the current COVID-19 wave has caused no substantial problems for the French economy.
Bruno Le Maire, France’s Finance Minister, made the following remarks: “Remember, this is the same person that downplayed the original COVID-19 epidemic last March. And look what occurred after that. But I suppose he’s got a job to do.”
He adds that there is no need for more limitations at this time, but we’ll see if the infection trend agrees with that in the following days/weeks. Yesterday, France registered nearly 30,000 new daily cases, in case you missed it.

Australia

The RBA’s stated worries concentrate mostly upon inflation and wages. The RBA has indicated widespread comfort with underlying inflation. Despite the fact that headline inflation is 2.1 percent, core inflation is 3 percent. So, earlier this week, the headline from the RBA’s head of domestic markets seemed intriguing.

The question is whether asset values are’reasonably valued’: “Asset prices rise as risk-free rates fall, and this is part of the monetary transmission process.” “While bank bond spreads are near their lowest level in over a decade, it’s impossible to say if this is due to fundamentals.” So, keep in mind that the RBA’s official position is that no rate rises will occur until 2024, or when the labour market has made sufficient progress. They have stated that they want to see “real inflation that is stably within the goal range of 2 to 3%.” This will necessitate a labour market that is tight enough to generate wage growth that is considerably greater than it is now.’

However, if asset values are thought to be in a bubble, raising or threatening to raise interest rates can assist deflate those bubbles. Overall, the crucial point to remember is that the AUD has been massively sold for quite some time. Any good data, particularly on wages, could provide the AUD a boost and allow some of the massive AUD short bets to unwind.

China

There have been fears about China’s economic prospects, but I suppose this gives some reassurance that local authorities will provide some type of supporting measures whatever – a message that they’ve reaffirmed throughout the last week.
As a reminder, Thanksgiving is tomorrow, so trading conditions this week may be impacted, with things likely becoming more chaotic today before quieting down ahead of the holiday break.

USA

The dollar is in solid shape across the board, however USD/JPY bulls are still struggling to maintain a move over the 115.00 barrier. This week will be crucial in determining whether or not the greenback’s momentum can be sustained.

New Zealand

Meanwhile, the kiwi is under pressure following the RBNZ’s 25 basis point rate hike – some expected a 50 basis point increase – as the NZD/USD crosses 0.6900. Keep a watch out for more support near the end-of-September lows @ 0.6860.

Elsewhere, the oil market is reacting as it should, with a’sell the rumour, buy the truth’ move in effect, though I would suggest that gains may be more restricted as we await the OPEC+ decision next week.

However, in the larger picture, it supports view that the SPR release isn’t a substantial drag on oil prices, but be mindful of the worldwide COVID-19 scenario, which might impede demand circumstances heading into next year, particularly in Europe.