ROB’S DAILY UPDATE

"The United States is back"

"This day brings good news: The United States is back. And Europe stands ready to
reconnect with an old and trusted partner (..),” wrote Ursula von der Leyen, the president of
the European Commission on Twitter. Joseph R. Biden Jr. prepares to be sworn in as 46th
President of the United States after taking the oath of office around noon (1700 GMT), he is
set to issue several executive orders aimed at reversing policies on issues like the
environment and immigration. Outgoing US President Donald Trump who is about to leave
the White House and fly to Florida will become the first President in more than 150 years
not to attend the inauguration of his successor. Trump issued a raft of 11th-hour pardons
and commutations early Wednesday that included his onetime political strategist Steve
Bannon, former top fundraiser Elliott Broidy and two well-known rappers (Lil Wayne &
Kodak Black).

Stock futures gained on Wednesday ahead of President-elect Joe Biden’s inauguration.

Biden's inauguration speech will focus on the need to bring the country together on the
heels of a violent riot on Capitol Hill and amid extreme partisanship in Congress. I also
expect that Biden will mention his massive COVID-19 relief plan, which Janet Yellen,
Biden’s designated nominee for Treasury Secretary, endorsed yesterday in front of the
Senate Finance Committee ("act big"). I expect Wall Street to perform well for the remainder
of the first quarter of 2021, fueled by further fiscal stimulus and the ongoing mass
vaccinations.

What else?
Jack Ma made his first public appearance in months. His tech empire continues to face
scrutiny from Chinese regulators.
Trump wished the Biden’s administration success in farewell video without naming him
Record COVID-19 death toll in Germany. Number of fatalities increased by 1,734 to
48,997 in the 24h through Wednesday morning (data from Johns Hopkins University)

DAILY UPDATE

Trump prepares to leave Washington

US President Donald Trump departs Washington on Wednesday with Americans more

politically divided than when he arrived four years ago. Trump is not planning to meet
President-elect Biden, who will arrive in Washington today and stay at Blair House across
the street from the White House. Trump will be leaving for his Mar-a-Lago club in Palm
Beach, Florida before President-elect Joe Biden is inaugurated on Wednesday. The last
President who chose not to attend his successor’s inauguration was Andrew Johnson in
1869, another impeached President. President-elect Biden called Trump's absence a "good
thing". According to official figures, about 400,000 Americans will have died from COVID-19
by the time Trump leaves the White House. Unemployment is more than a third higher than
when he took office in 2017.

Trump chaotic presidency ends with a 34% approval rating - the lowest approval rating
of any of his predecessors since the Gallup poll began in the 1940s. The coronavirus
pandemic, which Trump completely ignored after his election defeat, has worsened in
recent weeks, killing more Americans every day on average in 2021 than the 9/11 terrorist
attacks.

What else?
Germany discovers new coronavirus variant among a group of hospital patients in
Bavaria.
IEA cuts oil demand forecast on renewed lockdowns.
Janet Yellen, upcoming Treasury Secretary will speak in front of Senate Finance
Committee and urge that government must "act big" with next coronavirus relief package.

ROB’S DAILY UPDATE

Europe extends lockdowns as cases surge

With faster-moving new COVID-19 variants taking hold in Europe, governments are
scrambling to mitigate their effects on already close to record high infection numbers. Since
Saturday, the French are not allowed to leave their homes between 6 pm and 6 am.
Germany will likely extend lockdown measures until at least mid-February and may impose
a nighttime curfew in coronavirus hot spots. German Chancellor Angela Merkel warned of
the risks posed by variants that can spread more quickly. The UK shuts its borders to
anyone who hasn’t tested negative. Irish coronavirus hospitalizations hit a record as the
nation grapples with one of the worst outbreaks in the world. Austria follows Germany's lead
and extends its lockdown to Feb. 7.

US markets remain closed due to Martin Luther King holiday

What else?
UK steps up mass vaccination program and aims for early March lockdown easing
While the world struggled, China's economy grew 2.3% in 2020
 Germany moved a step closer to a post-Merkel era, with her ruling CDU electing Armin
Laschet as new chairman. The race for her successor remains open

MARKET UPDATE

JPM beats estimates with record trading revenue

JPMorgan Chase crushed expectations on record trading results and a boost from releasing
money previously set aside for loan losses. JPM's Q4 earnings per share of $3.79 was way
above estimates (~$2.60).

We made the perfect prediction as I expected the EPS to be above $3.00 on strong trading
activity, but JPM is still trading lower (- 2.0%) due to bad results from the other banking
giants (Citigroup and Wells Fargo), which resulted in an overall shaky start into the earnings
season. Furthermore, retail sales dropped a hefty 0.7% last month as renewed measures to
slow the spread of COVID-19 undercut consumption.

A tough pill to swallow considering our perfect prediction. I expect JPM to rebound - but
we may see first additional selling in the banking sector after opening. This is trading -
sometimes you make everything right and still don't get rewarded for it.

DAILY UPDATE

Biden unveils $1.9 trillion relief plan

President-Elect Joe Biden unveiled a $1.9 trillion stimulus package that includes
additional direct stimulus payments, a $15 minimum wage, aid to small businesses, and a
national vaccination program, among many other provisions. "It’s not hard to see that we’re
in a once-in-several-generations economic crisis," said Biden yesterday evening US time
when he revealed his plan. "We have to act and we have to act now." Biden added that he
plans to unveil a second major package at a joint session of Congress next month, aimed at
longer-term economic rebuilding.

What else?
JPM, Citigroup, Wells Fargo kick off earnings season.
Gold and Bitcoin recovered - Bitcoin back at ~$38,000.
Renzi pulled the Italia Viva party out of the ruling coalition government in Italy, denying it
a majority in parliament causing a political crisis
NZD/JPY

US stocks remain in sideways movement ahead of the beginning of the Q4 2020

earnings season. Banks will kick off this years first earnings season and I expect solid
results. Unlike many US stocks, I don't see the current US banking majors overpriced.

However, weak jobless data today acted as a bummer before today's NYSE opening.

The political turmoil in Washington is priced in and a political change is on it's way anyways.
I expect President-elect Joe Biden's stimulus plan to be unveiled later today and include a
boost to the recently authorized $600 direct payments to most Americans (to $2,000).

The last important pillar (next to stimulus and the upcoming earnings) is the vaccine
situation. I expect that it's more likely that we hear positive than negative news surrounding
the vaccines and the ongoing rollout.

We also see recovering commodity prices.

Tip: You can multiply your usual lot size by ~ 1.25 - 1.50 (125% - 150%) trading
NZD/JPY

US Treasury yields rose again and kept the USD supported against major peers in early
European trading today. President-elect Joe Biden will give details today of a plan for more
money for pandemic relief. The Treasury yields ticked up after CNN reported the package
will be around $2 trillion. US will further increase its debts and the money in circulation.

More stimulus will also support the risk-on mood.

The latest comments from the FED also reinforced expectations of loose monetary policy,
with FED Reserve Governor Brainard pushing back against suggestions the central bank
could taper its bond-buying program this year.

Oil prices are stabilizing and may see additional support from positive vaccine news as
J&J's experimental coronavirus vaccine shows it generated an immune response in nearly
all volunteers, with minimal side-effects, after a single shot

MARKET UPDATE

Trump impeached for a second time

With only five votes left, there is no way that US President Donald Trump will not be
impeached by the House of Representatives for inciting the attack on the US Capitol last
week. He will become the first President in US history to be impeached twice.

House Speaker Nancy Pelosi opened the debate on the House floor and argued the country
cannot risk leaving the president in power. "He must go. He is a clear and present danger to
the nation we all love."

Once the House sends the impeachment article to the Senate, the upper chamber has to
quickly start a trial. It would then vote on whether to convict Trump which would result in the
actual removal from office. I don't expect the Senate to vote before January 20 and looking
on the results of the House vote I don't think that 2/3 of the Senators will vote for a
conviction.

ROB’S DAILY UPDATE

Trump loses support among Republicans

As the House prepares to move forward with a vote to formally charge US President
Donald Trump with inciting violence against the government of the United States, a small
but growing number of Republicans publicly support the effort. In 2019, not a single
Republican voted in favor of impeachment. Breaking with Trump, Republicans are not
formally pressuring their party members to choose either vote. Former Trump supporter and
Republican leader Senator Mitch McConnell told associates that he was fine with the House
moving forward with impeachment and that Trump indeed committed impeachable offenses.

What else?
Trump said he’s not at risk of being removed from office. He also called his remarks
before the attack as "totally appropriate."
Global rollout of Sinovac Biotech vaccine kicks off but uncertainty over its efficacy
remains
Drugmakers push back on UK plan to stretch out vaccine doses
US will require negative virus tests from international passengers arriving by air. Policy
going into effect on Jan 26

ROB’S DAILY UPDATE

Pence rejects "Trump unfit for office" vote

 US President Donald Trump and Vice President Mike Pence have met for the first time
since rioters stormed the Capitol last week. Pence signaled he’ll spurn demands to declare
Trump "unfit for office" and instead agreed with him to work together through the end of
their term. That means that today's vote by the majority Democrats to call on Pence to
invoke the Constitution’s 25th Amendment serves mostly as a symbolic gesture intended to
show that House Democrats exhausted all options before moving on a historic second
impeachment. I expect House Democrats to vote Wednesday to impeach Trump during his
last days in office.

What else?
Merkel warns that Germany may need another 10 weeks of lockdown to get the
infection numbers under control
Pound recovered short-term after BoE pushed back on negative rates speculation
AstraZeneca applies for EU approval of its vaccine
Bitcoin rebounded after Monday's steep plunge

As the UK pushes its vaccination schedule and opens another seven major vaccination
centers today, UK chief medical officer Chris Whitty warned that the next few weeks of the
pandemic will be the worst yet. With more than 60,000 cases per week, the UK has the
highest rate of infection since the beginning of the pandemic and is soon hitting a record of
people hospitalized with COVID-19 as well. I fear that the number of deaths will rise sharply
again soon. In addition, expectations are rising that the Bank of England will eventually
introduce negative interest rates. Interest rates in the UK are already at a record low (0.1%).
BoE policymaker Silvana Tenreyro will give a speech about negative rates at 14:00 GMT
today..

Trump permanently suspended on Twitter

Twitter permanently suspended US President Donald Trump’s Twitter account on Friday

evening (local time). The decision came after Facebook made a similar call recently,
extending an initial 24-hour suspension to an indefinite one.

The company said in a tweet that it made the decision to permanently suspend Trump's
account "due to the risk of further incitement of violence."

Trump can no longer access his account and his tweets. The President had 88.7 million
followers on his "private" account prior to his suspension. "Without the tweets, I wouldn’t be
here," said Trump in an interview with the Financial Times in 2017.

Full Statement from Twitter Inc

 We see precious metal prices with heavy losses today which increased further after the
USD reached a two-weeks high against most of its peers. The USD is now weakening again
and pushed our USD/MXN and AUD/USD deep in profit in less than an hour. The improved
risk sentiment also put pressure on precious metal prices today. The biggest impact on
gold, however, is the increased yield on US treasuries, that put pressure on the non-yielding
yellow precious metal. Gold also lost some investors to the"digital gold" bitcoin in recent
weeks. We certainly see an overreaction and the slumping gold prices also dragged down
silver, platinum and to some extent palladium. This panic selling will soon find an end.
Industrial demand for many precious metals including non-precious metal remains very high
which will at some degree also support gold prices. I expect gold to reach back to $1,870
early next week.

Try to get in as LOW as possible.

Tip: You can multiply your usual lot size by ~ 0.50 – 0.75 (50% - 75%) trading Gold
(XAU/USD)

MARKET UPDATE

US lost 140,000 jobs in December

Job creation came to a halt in the US in December as new restrictions to battle the surging
COVID-19 cases hammered the virus-sensitive industries.

The Labor Department reported Friday that nonfarm payrolls fell by 140,000 (vs. +50,000
expected). The overall unemployment rate, however, fell by 0.1% to 6.7%.

The industry saw a plunge of 498,000 positions for the month, with most most job losses in
restaurants and bars, which saw a drop of 372,000. Employment in hospitality, which
includes hotels, remains 23.2% lower than at the beginning of 2020.

I believe that this increases expectations for further stimulus measures and believe that
these expectations offset increased safe haven demand for the USD. We position us short
in the USD

ROB’S DAILY UPDATE

Trump finally admits defeat to Biden

Without mentioning the name of President-elect Joe Biden, US President Donald Trump
admitted, for the first time in his own words, that the Biden administration would take charge
on Jan. 20. “Now tempers must be cooled, and calm restored. We must get on with the
business of America. My focus now turns to ensuring a smooth, orderly and seamless
transition of power,” said the President in a video that the White House released on Twitter
on Thursday (0:10 GMT today). Trump, who was blocked from Twitter for 12 hours and
remains blocked on Facebook also briefly spoke about the violent riots at the US Capitol.
“To those who engaged in the acts of violence and destruction, you do not represent our
country. And to those who broke the law, you will pay.”

What else?
Pfizer/BioNTech's vaccine effective against new coronavirus variants from the UK and
ZA according to a study
Germany & US record most COVID-19 fatalities in single day
Gold and Bitcoin dipped on more USD demand but will likely recover quickly

Definition of terms

Stock indices - are CFDs representing the weighted price of a section or a whole stock
market. My recent trade signal is buying DAX which represents weighted price of the top 30
biggest German companies which includes Daimler, BMW and Volkswagen, famous car
manufacturers.

Other indices that we can trade:

NASDAQ100
US30 (Dow Jones)
Hang Seng Index
CAC 40
FTSE 100
EuroStoxx 50

You can search about them online

European stocks closed higher today buoyed by the confirmed election of Joe Biden as
upcoming US President, following dramatic scenes when pro-Trump rioters stormed the US
Capitol building. More importantly for the markets have been the US Senate runoffs in
Georgia which have both won by Democrats. The victories set up a 50-50 split in the
Senate, giving Democrats a slim majority with Vice President-elect Kamala Harris being
able to give a tie-breaking vote in the Senate. The trans-Atlantic relationship has been
damaged by current US President Donald Trump and many investors believe that Europe
and the US will move closer together again under a Biden administration. However, while
the US was busy with domestic political unrest, the EU almost quietly finalized a trade deal
with China (still needs to be ratified by the European Parliament) - pushed by German
Chancellor Angela Merkel.A deal that will get a new transatlantic relationship off to a bad
start. For the export heavy German industry, a trade deal with China is very good news.
Meanwhile, Germany’s Health Minister Jens Spahn said today that Germany has enough
vaccine for “everyone” this year. “In 2021, we will have 50 million vaccine doses from
Moderna and 90 million from BioNTech." The DAX will move past 14,000 tomorrow again
(reaching new all-time highs).

Try to get in as LOW as possible.

Tip: You can multiply your usual lot size by ~ 7 - 9 (700% - 900%) trading DAX (GER_30

MARKET UPDATE

Elon Musk is now the world's richest person

Today's massive surge in Tesla pushed Musk past Jeff Bezos, who had been the richest
person since 2017.

Elon Musk started 2020 with a net worth of $27 billion and is currently at $186 billion,
surpassing Jeff Bezos, whose current worth is about $184 billion.

Amazon's stock price has been mostly in sideways movement since June 2020 and now
comes under some additional pressure due to the potential for increased regulation from
Washington.

The Democrats won control of the US Senate, clearing the way for a larger fiscal stimulus
under President-elect Joe Biden.

I don't expect further disturbance in the stock and forex market.

I also believe that the general risk sentiment will improve now as I don't expect further
disturbances in the Trump-Biden transition.

Oil prices traded mixed, but still at elevated levels after a bigger-than-expected drop in US
crude stockpiles and Saudi Arabia’s surprise pledge earlier this week to cut output by one
million bpd in February and March.

Weekly US jobless claims were little changed and totaled 787,000 for the week ended Jan.
2. Dow Jones economist expected 815,000 new fillings. Continuing claims continue to
decline (-126,000).
Hint: CAD is directly related to oil prices.

DAILY UPDATE

Biden win certified after deadly riots

Hundreds of supporters of US President Donald Trump stormed the US Capitol

yesterday, engulfing the building in chaos after Trump urged his supporters to fight against
the ceremonial counting of the electoral votes to President-elect Joe Biden's win. The attack
saw a total of four people die. Lawmakers resumed the session after the police managed to
remove the mob. Democrat Joe Biden's victory was confirmed by a joint session chaired by
Vice President Mike Pence on Thursday at around 3:30 am local time (8:30 GMT), who
defied Trump's call to overturn his defeat in the November election. Pence also confirmed
his own loss to Vice President-elect Kamala Harris and said that the violence had been a
"dark day in the history of the United States Capitol". Trump finally pledged an "orderly
transition" of power.

What else?
Democrats take control of Senate with Georgia wins
Trump blocked by Twitter for 12h and Facebook for 24h
Crypto market value tops $1 trillion. Bitcoin hits $37,000.
China compares US Capitol riots with Hong Kong protests

The riots in Washington will not have a massive impact on the markets - unlike most
investors currently assume. I believe that US President Donald Trump will now lose a lot of
support among the Republicans, which will ultimately lead to the unrest in US politics finding
some relief.

The two Democrats bet in Georgia won the Senate seats. There is an increasing chance of
more fiscal stimulus measures (as the Democrats control now both chambers of the US
Congress and the White House).

Gold will find support in the $ 1,900- $ 1,915 range.

Definition of terms: SUPPORT - a price level where prices stop dropping.

RESISTANCE - a price level where prices stop rising.

Tip: You can multiply your usual lot size by ~ 0.50 – 0.75 (50% - 75%) trading Gold
(XAU/USD)
 Rioters storm US Capitol after Trump urges action

Vice President Mike Pence was ushered out of the Senate as the US Capitol Complex went
into lockdown due a tense situation with demonstrators. Police officers drew their guns
inside the House chamber after pro-Trump protesters broke into the Capitol building and
thousands swarmed the steps outside.

“This is what the president has caused today, this insurrection,” said Mitt Romney to a
reporter close to the scene.

We see the markets with a panic reaction which caused some panic selling (that I don't
think will last). Please make sure to set SLs for all your open positions. We may see a
strongly worsening risk sentiment in case the situation escalates further.

DAILY UPDATE

Democrats closer to control of senate

Democrat Raphael Warnock won the Georgia US Senate runoff, flipping a Republican
seat and bringing Democrats one step closer to control of both chambers of the US
Congress and the White House. In the other ongoing election, Democrat Jon Ossoff was
leading against Republican Senator David Perdue but was declared too close to call.
Republicans in Georgia started to point fingers at US President Donald Trump for damaging
their chances as they confronted the possibility that Democrats could win both races. In the
meantime, Trump is doing what he's been doing for the past few weeks - he's questioning
the results.

Indices & Equities, USD, Risk Sentiment

What else?
Saudi Arabia surprised with large reduction in oil output for February / March
Japan’s daily cases topped 5,000 for the first time. The country prepares to declare a
state of emergency.
Germany’s daily COVID-19 death toll exceeded 1,000 for only the second time. Merkel
called an emergency meeting to accelerate the vaccine rollout.
NYSE is reconsidering its decision to halt the delisting of three major Chinese telecom
firms

Investors are now getting more confident that the Democrats can actually win the US
Senate runoffs in Georgia. According to current projections Democratic Party candidate
Raphael Warnock is set to win the runoff election in one of the two Georgia Senate seats in
play (just as I predicted yesterday). The other race, between Democrat Jon Ossoff and
Republican David Perdue, is also strongly leaning towards Ossoff, who holds a lead of
nearly 13,000 with over 99% of votes counted.

Saudi Arabia surprised the market with a large cut in crude production

Trivia: Yesterday (January 4) was the first time since 2016 when New York Stock Exchange
(Wall Street) closed with losses on the first trading day of a year.

DAILY UPDATE

Georgia decides who controls the US senate

The US state of Georgia is going to the polls today in a vote that will decide whether
President-elect Joe Biden's Democrats control both chambers of the US Congress. If the
Democrats Jon Ossoff and Raphael Warnock both win their runoff elections in Georgia the
US Senate would consist of 50 Democrats and 50 Republicans. However, it would allow
Democratic vice-president Kamala Harris to break the tie as she can also vote in the US
Senate. It would be the first time that the Senate would see a Democratic majority since
President Barack Obama's election in 2008 and crucial for pushing through Biden's agenda
including key issues such as health care and environmental regulations, but also further
stimulus measures.

What else?
NYSE says it will no longer delist three Chinese telecom giants
UK is delaying second vaccine shot in an effort to give more people a first dose. A very
controversial strategy.
Germany surprises with strong retail sales (Nov) and falling jobless numbers

Gold prices pushed substantially higher in recent days buoyed by weak USD and
increased safe haven demand ahead of the US Senate runoffs in Georgia that will
determine which party controls the US Senate and prospects of additional fiscal stimulus.
Most investors don't believe the Democrats can win both of the remaining Senate seats.
However, US President Donald Trump electrified voters again after pressuring top Georgia
election officials to scrap the election results. I believe that a Democratic sweep in Georgia
became substantially more likely now. Underpinning gold, the UK went into a new national
lockdown to contain a surge in COVID-19 cases. Meanwhile in New York, the more
contagious variant of the coronavirus from the UK was found - it may increase safe haven
demand even further. I expect gold to try breaking its current resistance at $1,950 and be
successful with it in the upcoming hours.

Try to get in as LOW as possible.

Tip: You can multiply your usual lot size by ~ 0.50 – 0.75 (50% - 75%) trading Gold
(XAU/USD).

I am seeing a massive US deficit and interest rates at record lows for many months to
come, including a negative US trade balance.

Wall Street is also keeping an eye on Georgia as the state prepared for Senate runoff
elections tomorrow. There is a possibility that the Democrats win both runoffs in Georgia
(regular and special Senate election). The Senate currently stands at 50 Republicans and
48 Democrats. Vice President-elect Kamala Harris can also vote in the senate, which would
mean that the Democrats would effectively control the chamber in case the Democrats win
both of the races. With both chambers (House and Senate) in hand of the Democrats,
President-elect Joe Biden will have free rein to increase fiscal stimulus measures.

Beijing cut the weighting of the USD in a key currency index basket. Chinese factory
activity continued to accelerate in December

The outlook for more lockdown measures in the Europe but also in some Asian
countries are rising again.

Japanese Prime Minister Yoshihide Suga said his government was mulling a state of
emergency in Tokyo as coronavirus cases rose.

Japan is still in the process of screening the results from Pfizer/BioNTech's vaccine that
applied for emergency use approval in December. I don't expect vaccination in Japan to
start before March

I shared with many of you my GBP/USD before NYSE opening as there is little to no
doubt that the post-Brexit deal will pass both parliamentary hurdles (it passed the first
already). Tougher restrictions in the UK weighed on the GBP earlier but I think that most
investors saw them coming. "The hope of the vaccine and testing alone are not going to be
enough for the next few weeks, and possibly longer. It’s now in these very tough winter
months that we really must keep focus, keep discipline," said UK Prime Minister Boris
Johnson in a TV interview. Infection numbers (and daily deaths) are also rising in the EU,
and the more contagious COVID-variant that was first found in the UK also made its way to
the US. I still believe that the GBP/USD is a good trade but if you want to reduce variables,
you can trade the GBP/CHF instead (isolate the GBP and thus not additionally trade the
weakness of the USD). Please work with a SL.

The market reacted exactly as I had forecast and the USD turned south again after USD
bears shrugged off the delay in further US stimulus. I have little doubt that we will not see
additional financial aid in the upcoming two months. The senate will discuss the increase in
COVID-19 relief payments to $2,000 in early January and I am certain that President-elect
Joe Biden will push for even more economic support measures in 2021. The USD will
remain weak throughout 2021, as also the FED will not change its ultra low interest rates
policy anytime soon. A weak USD supports commodity prices from which the AUD and NZD
benefits. We also see a general improvement in risk sentiment after the UK gave the
AZ-Oxford COVID-19 vaccine emergency use approval. I expect that Moderna's vaccine will
receive emergency approval from the EMA in the first week of January (Jan 4 - 10). We see
limited liquidity in the markets today but I expect the NZD/USD to be able to break through
0.72000 in the upcoming days and rise further to new multi-year highs (potentially today)

ROB’S DAILY UPDATE

Global markets reach record highs

Asian market were able to break days of sideways movement and turned positive during
Asian trading hours. European equities rose strongly in early European trading. The FTSE
rose an impressive 2.6% today and the GBP rebounded from losses after a weak session
yesterday when trading activity was still low. The gains came after US President Donald
Trump signed a $900 billion COVID relief bill into law. The signing came days after Trump
demanded a $2,000 direct payment. The House passed a bill to increase the direct
payments to $2,000, but the Republican-led Senate is unlikely to pass the measure.
Investors are also cheering the post-Brexit trade deal - or rather that a disaster was
avoided.

In an unusual twist the US President was supported by Democrats while Republicans

are now under pressure to approve the additional relief in the Senate. In a rare rebuke in
the House Republicans joined Democrats to override Trump’s veto on the $740 billion
defense policy bill - another strong sign that Trump loses support in his own party. The final
decision will also be made in the Republican-led Senate. I expect that the markets will
continue to rise. We have positioned ourselves very well and our community has again
benefited massively from the current developments. The dollar slipped with Treasuries,
which also supported the gold price - we foresaw that too.
 Indices & Equities, USD, GBP, Gold

What else?
France, Spain plan registries on their vaccine campaigns in an attempt to bolster public
uptake of COVID-19 vaccine and increase pressure on those who refuse to vaccinate -
Bitcoin fell back after a rally over the holiday pushed it past $28,000
Police investigating suspected poisoning of billionaire game tycoon Lin Qi after
Christmas Day death

MARKET UPDATE

Outline of Brexit trade deal has been reached

The UK and the EU are getting closer to a historic post-Brexit trade deal. First news popped
up minutes ago, my contact in Brussels confirmed - Brussels is expecting a trade deal now,
but any official announcement can still be hours away.

UK Prime Minister Boris Johnson and European Commission President Ursula von der
Leyen have intervened personally in recent days, holding several phone conversations in a
last-ditch bid to reach an agreement. It seems we are very close to a breakthrough.

VIP SIGNAL
BUY NOW FTSE 100 (GBR_100)
BREXIT SHOWDOWN

Tip: You can multiply your usual lot size by ~ 10 - 12 (1,000% - 1,200%) trading FTSE
100 (GBR_100)

DAILY UPDATE

Trump rejects $900bn COVID relief bill

US President Donald Trump surprised everyone, including his own Treasury Secretary
Steven Mnuchin, and called the $900 billion COVID relief bill passed by Congress an
unsuitable “disgrace” as he refused to sign it. In a video that the outgoing President posted
on his Twitter account he started to list unnecessary expenditures but most of all asked to
increase the "ridiculously low" $600 checks for individuals to $2,000. Trump also said that if
Congress doesn’t deliver the relief package he wants, it will be left to the next administration
and added “maybe that administration will be me, and we will get it done.”
 Wall Street rebounded reversing a strong decline of up to 5% after Trump attacked the
coronavirus relief bill. The market is divided on how to take Trump's last minute call for
larger direct payments and Congress is under intense pressure to deliver a package that
the outgoing President is willing to sign. In another unexpected twist, one of Trump’s
political arch enemies, House Speaker Nancy Pelosi, agreed with Trump's call for $2,000
direct payment. “Democrats are ready to bring this to the Floor this week by unanimous
consent. Let’s do it!” However, several Senate Republicans have resisted higher stimulus
payments. I believe that the "Santa rally" is now off, unless Congress can agree in
increasing the direct payments before Monday. I don't expect markets to crash, as
Congress passed the measure with veto-proof majorities. The dollar slid amid the chaos
surrounding the COVID relief bill, as a growing number of investors now expect a bigger
stimulus package (or at least larger individual stimulus payments).

What else?
Wednesday Brexit trade deal?

The GBP is off its low as hopes of a last minute Brexit deal increase among investors.
Nine months of talks between the UK and EU over a post-Brexit trade accord are hanging in
the balance, with officials trying to bring them to a conclusion today. UK Prime Minister
Boris Johnson and European Commission President Ursula von der Leyen intervened in
person on Monday and Tuesday and made several phone calls to bring an agreement
across the finish line. The EU said today would be the last day for discussion as it would
otherwise be impossible to ratify the new agreement. A contact of mine in Brussels said that
he doesn't expect a deal to come today. However, I do not believe that the talks will be
broken off this evening and that the negotiations will either continue or a compromise will be
found overnight. Meanwhile, France agreed to end a suspension that crippled Britain’s
busiest port in Dover, which helped European stocks in early trading to recover.

We are in the last week of a chaotic Trump era (at least with him as US President) that has
had a major impact on how we had to trade the markets. The day before Christmas Eve, the
markets remain very volatile - a rarity. We stay 100% focused

US President Donald Trump is looking at his last days in office and he just could not
leave without another surprise for the stock markets. The COVID-19 relief bill that
lawmakers both Democrats and Republicans were arguing about for month was not signed
by him. Instead, he demanded changes to the bipartisan stimulus legislation, most notably
to increase stimulus checks from the ”ridiculously low” amount of $600 to at least $2,000 or
even $4,000 in some cases. In a surprise video announcement posted on his Twitter
account, Trump called the bill a “disgrace” being full of “wasteful and unnecessary items”. If
he does not sign the omnibus bill where the COVID-19 relief bill was attached to or
threatens to veto it, the government will shut down after the Christmas holidays. House
Speaker Nancy Pelosi responded immediately to Trump’s video message by welcoming his
call for $2,000 checks for most Americans. This sudden change from the Trump
administration after frantic negotiations among congressional leaders is just lunatic. The
USD has already been pushed down by the relief bill passing Congress, however, with the
call for at least an additional $1,400 per American and the government threatened to shut
down after Christmas I expect further headwinds for the dollar. We position us long in the
AUD/USD, as I expect the AUD to further gain in value from both iron ore and copper prices
climbing from one multi-year high to another.

Try to get in as LOW as possible.

Tip: You can multiply your usual lot size by ~ 1.25 - 1.50 (125% - 150%) trading
AUD/USD

The mutated variant of the coronavirus in the UK led to losses in both the pound and the
euro, while safe havens, such as the Swiss franc gained in value. During today’s trading
session the variant threatened to paralyze economic activities even further as the entire EU
banned travel from the UK. I consider today’s setback in the euro more temporary than the
establishment of a longer trend. First, the euro will not have to undergo structural changes
once the UK leaves the bloc independent of a deal or no deal. Admittedly, there will be
challenges with customs, level playing field and price sensitivity, however, the economic
losses will be smaller than those the UK will suffer if the entire European economic area
grants them limited access. Second, consumer confidence in the EU rose more than
previously expected in December, climbing from -17.6 to -13.9 index points. Most analysts
had expected only a small gain of +0.8 points compared to November’s reading. Finally, I
expect a higher demand from British investors in the euro to hedge against possible trade
restrictions.

In an effort to secure a Brexit deal the UK has issued a new proposal on fishing rights to
the EU. Recently both sides have already signaled that no further compromises will be
made, but the UK would now accept a reduction on fisheries by the EU by about a third.
Initially, the UK insisted heavily on a 60% cut, which later was reduced to 50% and stands
now at 33%. On the other side, the EU suggested in its first statement a reduction of 18%,
which was increased during the negotiations to 25%. Honestly speaking, they have been
haggling heavily over a business with an annual gross revenue of $40 million for the last
two weeks. It is not about who has the right to fish how much in British fishing waters, this
discussion is about the UK regaining their sovereignty and controlling their own territory. For
its part, the EU does not want to grant access to its single market without controlling parts of
the UK’s markets. Furthermore, the EU demands to impose tariffs and restrictions freely if
the UK rows back on any fisheries agreement, whereas the UK would accept such
retaliation measures only on fisheries. The major disagreement is how far one of them can
retaliate if the other breaks the rules
 Europe is on track to start vaccinations within a week

The European Medicines Agency (EMA) has authorized Pfizer-BioNTech’s coronavirus

vaccine for conditional use. Authorities in several EU countries including France, Italy,
Austria and Germany have said they aim to begin inoculations on Dec. 27.

The vaccine was first authorized in the UK, which began its historic rollout on Dec. 7. It has
proved 95% effective at preventing COVID-19 in late-stage clinical trials.

BioNTech (in cooperation with Pfizer) will also deliver more dosages than expected.
Germany will receive 1.3 million vaccine doses within 2020, which will be distributed to the
federal states and then further to vaccination teams. After that, 670k are added weekly
(Germany only). The federal government expected only 400,000 vaccine doses by the end
of the year.

The markets had already priced in the authorization, but I expect further tailwind for the
European markets tomorrow.

UK PM Johnson faces "Deal-or-No-Deal" decision

The UK Prime Minister Boris Johnson now has two options and will probably (have to)
decide within the next 24 hours: accept trade agreements with the European Union or go
solo. Whatever he and his cabinet decide, it will define his premiership. It could hardly have
come a worse time for Johnson as the UK and the country's government grapple with a new
highly contagious variant of the coronavirus that resulted in travel bans and slipped much of
England into an emergency lockdown. The UK will leave the EU's single market and
customs union at 23:00 GMT on Dec. 31. The EU is the UK's nearest and most important
trading partner.

Indices & (in particular EU and UK) Equities, GBP, Risk Sentiment

What else?
New viral COVID strain; US stimulus deal

Global stocks and futures are a sea of red in European and Asian trading as a new
strain of the coronavirus in the UK caused chaos ahead of the Christmas holiday. Energy
and travel stocks dragged the STOXX Europe 600 down by more than 3% - the biggest
drop since June, as a growing list of European countries closed their borders to the UK. We
also had the perfect read for the US stimulus deal, as lawmakers in Washington were finally
able to agree to a $900 billion relief package, which would provide direct payments and
jobless aid to struggling Americans. Despite the deal, the Dow is currently trading ~500
points lower, as fears over the new COVID strain and a no deal Brexit overwhelmed the
enthusiasm over a second stimulus package. The markets today will be very mixed and
trade with high volatility. US markets will outperform European markets this week.

Brexit talks at "moment of truth"

With the European parliament having said it needs agreement by midnight on Sunday
for it to be able to give its consent in a vote this year, the EU’s chief negotiator Michel
Barnier said the nine months of talks had hit now the “moment of truth”. According to
Barnier, the main obstacle to a deal in the final “few hours” is whether Brussels will be able
to hit British goods with tariffs if the government closes its fishing waters to EU fishing fleets
in the future. UK's chief Brexit negotiator, David Frost, warned in a tweet that the situation is
very serious and that progress seems to be blocked while time is running out.

The fishing rights is a tough obstacles and it doesn't seem like any of the two sides want
to give in. UK Prime Minister Boris Johnson said "The UK could not accept a situation
where it was the only sovereign country in the world not to be able to control access to its
own waters (..)”. I also believe that there is very little room that the new Sunday deadline
that was set by the European Parliament can be extended again as there would simply not
enough time to ratify the deal in time for the end of the Brexit transition period on Dec. 31. A
road to a deal could be a time limited agreement in which fishermen have access to UK
waters. I believe that the general tone remains pessimistic today putting some pressure on
the GBP, which will remain strong against its peers but not reach yesterday's highs. I see
the chances for a comprehensive trade deal before Sunday at below 40%.

Indices & (Brexit sensitive) Equities , EUR, GBP, Risk Sentiment

What else?
S&P 500 at all time highs with US stimulus in sight

The three major US indices, S&P 500, Dow Jones and Nasdaq remain steady at all time
highs as Congress works to complete a second US fiscal stimulus package. Just like in
Brussel and London the clock is also ticking in Washington. After months of deadlock amid
signs of a faltering economic recovery a bipartisan US stimulus deal “appears to be close at
hand,” according to Senate Majority Leader Mitch McConnell. I believe that the Democrats
and Republicans are able to find common ground today and will push it through the
Congress over the weekend. This stimulus package will be seen as sufficient to bridge the
time before Biden takes over office on January 20 and push the markets to new all time
highs while putting pressure on the USD, which saw a rebound in early European trading
 The USD was able to rebound slightly from heavy losses in Asian and early European
trading. Disappointing jobless data pushed some traders back to the USD, but I don't see
demand for the USD high enough to start a turn around - unless, the ~$900 billion stimulus
deal that is currently discussed in Congress fails to find common ground. I don't think so
and believe we will soon hear more encouraging news from Washington as time to deliver is
running out. The currently discussed plan includes a new round of stimulus payments,
something in the range $600 - $700, to American adults. It would also include a temporary
infusion of enhanced federal jobless aid of around $300 per week and additionally rental
and food assistance. The plan would also revive a loan program for struggling small
businesses and provide funding for schools, hospitals and the distribution of the vaccine.
The deal would be great news for global markets and would push the USD again down to
multi-year lows (against the AUD).

edit: It's also worth mentioning, that Australian job data continues to shine. The Australian
economy created 90K new jobs (vs. 40.9K expected). Australia's unemployment rate
dropped from 7.0% to 6.8%, its lowest level in three months.

Try to get in as LOW as possible.

Tip: You can multiply your usual lot size by ~ 1.25 - 1.50 (125% - 150%) trading
AUD/USD

The Japanese government has agreed on a record budget for next fiscal year. In detail,
spending will increase to a tremendous amount of 106.6 trillion yen ($1 trillion), of which
more than half will be used on social security. The publication follows just days after an
extra budget for Japan’s Prime Minister Yoshihide Suga stimulus package has been ratified.
The recent stimulus amount to more than $700 billion to conquer the economic impact of
the pandemic. Japan finds itself in a tight spot as on the hand both the government and the
Bank of Japan must provide enough stimulus to prevent a recession and on the other hand
must service their national debt with payments of more than 22% of their yearly budget. I
expect the current budget does not reflect Japan’s entire spending, given the pandemic the
government will likely introduce further stimulus packages as their daily confirmed infections
surpassed 3,000 recently. The BoJ further expands its support for companies hit by the
corona crisis. A bundle of measures to provide enough capital to these companies will be
extended by six months beyond March. Bank of Japan released a statement about an
examination of further monetary policy; it indicates the BoJ’s current policy does not achieve
the desired effect.

ROB’S DAILY UPDATE

"Narrow path" has opened for Brexit deal

 European Commission President Ursula von der Leyen said the "next few days are
going to be decisive (..) as things stand, I cannot tell you whether there will be a deal or not.
But there is a path to an agreement now - the path may be very narrow, but it is there." She
also confirmed that negotiators are working "day and night" to reach an agreement and that
actual progress has been made as how a deal would be enforced is now "largely resolved".
In London, UK Prime Minister Boris Johnson told his cabinet that he still wants a deal, but
would not agree to one "at any cost."

What else?
Crucial day for stimulus push

US President Donald Trump signed the one-week stopgap spending bill on Friday,
ahead of a midnight deadline that would have resulted in a federal government shutdown. It
gives lawmakers time till Friday to agree on a stimulus bill. However, I believe that today
seems to be the day when we find out if there is a path towards a deal or not. Some
Democrats are already favoring pushing ahead with the $748 billion proposal that leaves
out the most controversial elements and may help to find consensus. Majority Leader Mitch
McConnell and Minority Leader Chuck Schumer will hold press briefings later today. I
believe that the bipartisan deal on the table will receive support from both.

Hopes for progress in Brussel and London towards a Brexit trade deal support increase.
Negotiators are inching toward a trade deal as talks in Brussels continue around the clock.

At the same time, investors believe that they will figure out today, whether new US fiscal
stimulus is on the way before the end of the year or not. Chances for a deal in Washington
increased after the group that has been working on a bipartisan compromise split their initial
proposal to two separate legislative proposals. Republicans and Democrats failed to come
to a consensus on a liability shield for employers, which is now not part of the $748 billion
stimulus bill anymore. I believe chances that both House Speaker Nancy Pelosi and Senate
Majority Leader Mitch McConnel agree on it is higher than ever

Renewed restrictions to curb the spread of the virus in Switzerland.

Expansion throughout 2021 was revised to 3.2% instead of the originally forecasted 4.2%.

However, I expect the Swiss National Bank (SNB) to keep their interest rates unchanged at
-0.75% on its meeting this Thursday.
After an appreciation of the franc in the previous months, which forced the SNB to intervene
on the foreign exchange markets, the expected effects kicked in slowing down the program.
A few minutes ago, the annualized Producer and Import Prices came in better than
expected, which will confirm the SNB in its decision to reduce their foreign exchange
purchases.

Covid immunization has already started in US and Canada

UK Prime Minister Boris Johnson and European Commission President Ursula von der
Leyen gave Brexit negotiators another shot at closing a deal, shuffling stock markets at the
beginning of the week. After both set Sunday as the ultimate deadline to strike a Brexit deal,
they surprisingly extended the deadline after a phone call on Sunday night. A proposal from
the UK, that could break the dead end over competitive market rules, led to the extension. A
potential compromise could revolve around actions the EU might take if the UK refuses to
keep their labor- and market conditions in line with those of the EU. In the original statement
the EU would immediately impose additional tariffs and trade penalties if the UK will not
follow EU standards, whereas now it would adjust trade relations only after arbitration and
dispute resolution.

The first Pfizer / BioNTech vaccines left their factories for the first phase of the mass
vaccination in the US today

We expect another reference to the urgent need for another round of fiscal stimulus in the
Federal Reserve Meeting this week

"Strong possibility" of no-deal Brexit

European Commission President Ursula von der Leyen told the bloc's 27 leaders that
talks are "difficult" and that no deal at the end of the UK's transition period (Dec 31) is now
the most likely outcome. UK PM Boris Johnson said there is a "strong possibility" of no deal.
Weeks of intensive talks between officials from both sides have failed to overcome
obstacles in key areas, including competition rules and fishing rights. Talks will continue
until Sunday. The financial sector saw heavy losses in Europe with the STXE 600 Banks
Index (that includes UK banks) losing 2.25%. The GBP crashed by ~1% against major
currencies.

The No-Deal Brexit jitters have a very strong impact on European markets and even
extended to global markets. The FTSE 100 is currently 1.1% down but has substantial
downside potential in case more indications come to light that would point to a no-deal
Brexit. Banks are among the biggest losers with Barclays currently trading 4.8% lower. I
expect further losses of Barclays once it is available in New York as well. We observe the
situation in Brussels very closely. Traders will likely further push out of the GBP and Brexit
sensitive stocks ahead of today's equity markets closing in anticipation of an end of trade
deal talks on Sunday, which would lead to heavy further losses on Monday.

Indices & Equities (especially European), GBP, EUR, Risk Sentiment

What else?
US stimulus deal still unsolved; EU approves stimulus pack.

US pre markets are trading lower ahead of NYSE opening with the outlook for additional
fiscal stimulus remaining uncertain. While the general tenor seemed to become slightly
more optimistic there is still no sign of a breakthrough. The House has passed a one-week
federal spending extension to avoid a shutdown on Dec. 18, but time continues to run out
with every day that passes with no progress. The EU, on the other hand, was able to finally
fully approve its €1.85 trillion ($2.24 trillion) stimulus package after Hungary and Poland lift
their veto. Most of the money will be used for heavily hit regions within the EU and play an
important role for EU member states in their recovery from the pandemic

The biggest topic for today and for the whole weekend is the Brexit showdown. However,
we may also see FDA approval for Pfizer-BioNTech's vaccine in what is seen as a game
changer for the US, which currently has the highest number of COVID-19-related deaths
since the beginning of the pandemic. We make sure that we work with SLs at all times and
will benefit from the latest developments.

European Commission President Ursula von der Leyen showed strong pessimism that a
deal with the UK can be reached on Sunday and warned about a no-deal split with the UK.
Talks in Brussels continue till Sunday but point to little progress which would lead to an end
of trade-talks. On Thursday, UK Prime Minister Boris Johnson warned UK businesses and
the public to prepare for the "strong possibility" of a no-deal split. The banking sector sees
heavy losses and will have a hard time to attract investors today which will likely fear for the
worse over the weekend. We SHORT UK bank Barclays and the GBP against the JPY,
which also sees some safe haven demand. We are still LONG in the EUR/GBP as we
expected great uncertainty surrounding Brexit talks

Equity markets started mixed in today’s trading session as investors weighed prospects
for an US stimulus deal against disappointing US jobs data. I expect US Treasuries to gain
as the ultra-loose monetary policy as well as the weak USD push yields down.
Disagreements between Democrats and Republicans still exist over the stimulus deal,
although the two sides have remained optimistically regarding the talks. Senate
Republicans likely will not accept the bipartisan coronavirus legislation in its current form. I
expect resistance from the GOP as the Democrats attempted to put $160 billion in state and
local aid together with a temporary liability shield into the bill. This constant tug-of-war
between Democrats and Republicans will continue to put pressure on US yields.
Meanwhile, prices for soft commodities continue their rally on the stock markets. Lumber,
one of New Zealand's major exports, left the price correction from October behind. The US
and Canadian data on house prices and housing starts point to a further recovery in the
market and thus also to further increases in lumber prices.

The ECB escalated its efforts to shield the Eurozone from a possible double-dip
recession with another blast of monetary stimulus. Policy makers increased and extended
emergency bond purchases and secured more cheap long-term loans to banks on even
further improved terms. The Pandemic Emergency Purchase Program was increased by
€500 billion to €1.85 trillion and extended by nine months to at least the end of March 2022.
While this seems to cap gains in the EUR, I expect that the single currency will profit from
the decision as they are broadly in line with expectations. The ECB, and its president
Christine Lagarde made it clear in many previous statements that more easing was on the
way. The stability in the EUR, will push some GBP holders into the world's seconds largest
reserve currency especially given the increased uncertainty surrounding a post-Brexit trade
deal after UK Prime Minister Boris Johnson and European Commission President Ursula
von der Leyen agreed to give both sides until Sunday to try to bridge their differences -
without showing much optimism that a deal can be struck. Bank of England Governor
Andrew Bailey warned that a no-deal Brexit would cause more lasting damage to the UK's
economy than the COVID-19 pandemic. While I don't expect positive signals from Brussels
today, please make sure to always work with a SL (but give some leeway for the higher
volatility; SL area 0.91000)

The GBP is the weakest major currency today, no doubt about that but we also see the
general weakness in the USD to continue. Democratic and Republican leaders have been
unable to solve disagreements over further fiscal stimulus, which makes stimulus package
before Christmas increasingly unlikely.On the positive side (at least for the stimulus
package), the two sides managed to get together to approve a stopgap government funding
bill yesterday evening, proving that compromises can be made. Even if the Senate is unable
to agree on a bipartisan stimulus package, traders expect large fiscal stimulus in early 2021
and the FED to stay accommodative. In the meantime, we see the 62% iron ore index at a
seven and a half year high or more than 60% up in comparison to a year before.
Commodities as a whole rose strongly and the trend seems to continue, also buoyed by a
weak USD. The pair is currently trying to break the 0.75000 resistance, which I believe will
fall later today.

DAILY UPDATE

No deal, just another Brexit deadline

 Brexit talks remain true to themselves: Countless deadlines but only little progress. UK
Prime Minister Boris Johnson and European Commission President Ursula von der Leyen
agreed to give Brexit trade negotiations until Sunday, as they offered a gloomy assessment
of progress following a marathon dinner meeting. The leaders agreed that talks should
continue in the next few days despite major differences remaining between the UK and EU
over what their future trade relationship should look like. “We understand each other’s
positions. They remain far apart," wrote von der Leyen on Twitter. Johnson’s team had
hoped that a face-to-face meeting with the EC President would inject new political
momentum into the process, but they failed to break the deadlock.

The pound fell heavily against its peers and has now strong up- and downside potential
with more and more investors starting to believe that no deal becomes increasingly likely.
Traders hoped for positive signals from Brussels but the negotiations failed to break the
impasse. If no trade agreement is reached by the end of the week, I believe the chance for
a no-deal Brexit is higher than ever. The UK would face tariffs on exports to the bloc among
many other damaging disruptions. The economy would suffer a near-term shock of around
1.5% of output and the GBP would crash. The uncertainty will continue to weigh on the GBP
for today and tomorrow.

Indices & Equities, GBP, Risk Sentiment

What else?
US daily COVID-19 deaths top 3,000; More ECB stimulus

The coronavirus pandemic reached new highs in the US and Germany. For the first
time, COVID-19 related deaths in the US surpassed 3,000 a day. The Robert Koch Institute
reported 440 deaths yesterday and a record of 590 in Germany on Tuesday. German
Chancellor Angela Merkel demanded tougher restrictions to bring down coronavirus
infections before the debate on the German budget. Hopes for further positive vaccine news
and another blast of monetary stimulus from the ECB keep markets positive. I expect the
ECB to add €500 billion ($605 billion) to their emergency bond-buying program and extend
it until at least the end of 2021. Banks will likely be offered more ultra-cheap long-term loans

A small profit taking wave was triggered at Asian equity markets as worries over a Brexit
deal and the tug-of-war over further US stimuli motivated traders to cash in some of their
profits from the last days. Yesterday British Prime Minister Boris Johnson and European
Commission President Ursula von der Leyen met to discuss their main differences. They
have gained a clear understanding of each other’s positions. Unfortunately, no progress
was made. Large gaps remain between the UK and the EU and it is questionable whether
these can be bridged in only a couple of days. Both decided to prolong negotiations until
Sunday and that a ”firm decision” will be made until then. Boris Johnson and UK Foreign
Minister Dominic Raab asserted to discuss any possible deal, however, they are not willing
to reach a deal sacrificing ”basic points of the democratic principle.” Although, both sides
would be better off reaching a deal, voices became louder that no deal is better than a bad
deal. I expect the pound to decline in the short term as Brexit sentiment turned to the worse.
Meanwhile, the Swiss National Bank (SNB) meets the criteria for being classified as a
currency manipulator according to US rules. The SNB’s efforts to prevent the economically
damaging appreciation of the Swiss franc show only little effect. In a first reaction the franc
dropped in value over night, however, neither the publication of the US report nor the fact
the SNB is considered a manipulator triggers any sanctions or tariffs. I expect the Swiss
franc to recover its losses soon

DAILY UPDATE

White House offers a $916 stimulus package

The White House made a surprise re-entry into pandemic-relief talks with a $916 billion
proposal that opened a potential new path to a year-end deal. The proposal by Steven
Mnuchin, the Treasury secretary, was the administration’s first substantive engagement with
House Speaker Nancy Pelosi on a stimulus deal since the election. It shows willingness of
the outgoing administration to get a last-minute stimulus package through. The proposed
plan does not include the revival of the $300 (or $600) weekly enhanced unemployment
benefits, though it would extend other federal unemployment programs set to expire in the
coming weeks. However, it would include another, smaller round of direct payments to
Americans of $600 per person.

Global stocks climbed towards record highs as hopes for a stimulus deal and progress
in Brussels (EU-UK trade deal) keep markets positive. Investors are pushing back in
equities and the overall mood is strongly risk-on, despite no let-up in coronavirus cases. US
Treasuries fell, risk sentiment improved significantly and the dollar continued to slide. The
cuts in unemployment insurance benefits will make it impossible for Democrats to agree on
the President's proposal. However, the White House is showing willingness - which
investors see as a positive signal.

Indices & Equities, USD, GBP, Risk Sentiment

What else?
FDA may approve COVID-19 vaccine; PM Johnson in Brussels

Emergency-use authorization to Pfizer-BioNTech's vaccine may be granted as early as

Thursday. Vaccine distributions, which have already been planned, could begin within 24
hours if the US Food and Drug Administration (FDA) authorizes emergency use. UK Prime
Minister Boris Johnson will fly to Brussels to meet European Commission President Ursula
von der Leyen for talks on a post-Brexit trade deal. The pair will hold talks over dinner, after
negotiations between officials ended in a deadlock. Major disagreements remain on fishing
rights, business competition rules and how a deal will be policed. In separate talks on
Tuesday, the UK and EU reached an agreement on specific trade arrangements with
Northern Ireland including border checks

Analysts at Citibank (Citigroup) expect the EUR/USD to fall again to 1.19 within the next
three months. I have told you before, and say it again - I often disagree with the investment
banking giants and I am probably right 90% of the time, and at least one step ahead in the
rest of the cases I believe the EUR/USD will move towards 1.23 in the upcoming three
months. News that UK Prime Minister Boris Johnson is willing to turn his back to the EU and
leave the negotiation table without a deal kept sentiment in the EUR and especially the GBP
negative yesterday. While the GBP stays on the back foot, I expect positive signals from
Brussel today and tomorrow as I still expect an EU-UK trade deal. The biggest risks for the
EUR is a no-deal Brexit and political effervescence around the EU Recovery Fund. On the
other hand, we will likely see risk sentiment improving, which supports the EUR/USD and
hopes for fiscal stimulus in the US rising (which also puts pressure on the greenback).
White House economic adviser Larry Kudlow said that talks on another round of stimulus
funding to deal with the deadly coronavirus pandemic are moving in the right direction.
German Industrial Production surprised to the upside yesterday and expanded by 3.2%
(MoM) in October (vs. 1.5% expected). GDP numbers from the Eurozone came in as
expected earlier today, while the ZEW Survey showed that investors are more optimistic
about the German economy than expected (55 vs 46 expected - which means 55% of the
investors have an optimistic view). The most traded currency pair will likely reach back to
1.21400+ today (current support at 1.21000).

DAILY UPDATE

UK started vaccinations across the country

All Eyes on the UK again as the former EU country begins vaccination for COVID-19
today using shots from Pfizer and BioNTech. The UK’s National Health Service (NHS)
launched what it has called the biggest immunization campaign in its history. An initial batch
of 800,000 doses which is enough to vaccinate 400,000 people has been delivered from the
manufacturing site in Belgium, just days after the UK became the first Western country to
authorize the vaccine which was developed by BioNTech SE in Mainz, Germany for
emergency use. Care-home staff and hospital inpatients and outpatients aged over 80 are
the first to be immunized.
 UK Prime Minister Boris Johnson hailed a "huge step forward" in the fight against the
coronavirus, which has infected more than 1.7 million people and killed more than 61,000
people (linked to COVID-19) in the UK. Much is at stake for Johnson's government after it
was widely criticized for managing the pandemic poorly, especially in the early days. The
UK has Europe’s highest death toll from the virus and saw a stronger economic fallout due
to repeated lockdowns. However, recent economic data suggested that the UK is on a good
way and the now available vaccines may help the country to recover quicker than other
highly affected countries. We barely see the impact on the markets as the vaccinations are
fully priced in. At the same time, the UK is in last-ditch negotiations with EU for a post-Brexit
trade deal.

What else?
US infections rise; UK PM Johnson to travel to Brussels

Asian and European stocks saw a muted opening today as swelling coronavirus
infections across the US weighs on global market sentiment. The S&P 500 fell from an
all-time high, with losses in the energy and financial sectors, and fears of further lockdown
measures as infections continue to rise rapidly in many regions across the country. US tech
stocks remain positive and rose for a ninth straight day yesterday, its longest winning streak
in almost a year. Meanwhile, UK Prime Minister Boris Johnson warned that trade talks
reman "tricky" as he prepares to travel to Brussels for talks to break the deadlocked
negotiations over a post-Brexit trade deal. I expect positive signals from Brussels tomorrow,
maybe even today, but the pressure on the GBP remains for the time being.

While the markets are excited that vaccination has finally started (in a western country) it
will take some time - well into 2021 - before we see the first results. We may see the FDA
approving the Pfizer-BioNTech vaccine at the end of the week. In general, market sentiment
will stay overall positive despite sky-high infection and death numbers in the US.

The UK remains in focus as it started making the first COVID-19 vaccines available to
the public today, making it one of the first countries in the world to do so. At the same time,
the UK starts its final push for a last-minute trade deal with UK Prime Minister Boris Jonson
taking over Brexit negotiations. Johnson will meet European Commission chief Ursula von
der Leyen in person after two phone calls between the leaders failed to bear fruit. Both
sides remain divided over three key aspects: Fishing rights, competition rules and
governance of the potential deal, especially after MPs have voted to reinstate controversial
sections of the UK Internal Market Bill which allow ministers to override sections of the UK's
Brexit divorce deal. It's hard to estimate the chances of a deal. I would still say that it is
more likely that the UK and EU are able to agree on a deal. For now, however, the
uncertainty over the outcome of a post-Brexit trade deal area weighing on the GBP. The
downside potential if negative news concerning trade talks comes in are massive. Some
traders will exchange their GBP for EUR, which will push the EUR/GBP towards 0.91000. I
also expect that the euro will gain further support from greenback holders.

The dollar pushed higher in early European trade today rebounding from multi-year lows
against a basket of six other currencies. Rising COVID-19 cases and increased
No-Deal-Brexit fears increased the greenback's safe haven demand. On Sunday, California
Governor Gavin Newsom ordered large parts of the most populous US state to get back to
lockdown as COVID-19 cases spiked to record levels in the sunny state. California is also
seeing a record high for hospitalized COVID-19 patients. Other US states, such as New
Jersey and North Carolina also announced record one-day rises in new infections.
However, I see the tailwind for the USD limited (from safe haven demand) as growing
confidence of more fiscal stimulus and a potential emergency approval for
Pfizer/BioNTech's COVID-19 vaccine on Thursday will pressure the USD again and push it
back to levels seen on Friday. The AUD retreated from a worsening risk sentiment and
lower commodity prices in Asian trading hours.