Note The table above is updated before publication with the latest consensus forecasts. However, the text charts are prepared ahead of time. Therefore there can be discrepancies between the forecasts given in the table above and in the text charts.
Rates as of 0500 GMT
Yesterday was yet another big up day for stocks after Moderna announced that its vaccine candidate was 94.5 effective in a phase three trial and needs less refrigeration than Pfizers. The efficacy rate puts it above such standard vaccines as polio and mumps. Also, there were reports that advisors to PresidentElect Biden had ruled out a national lockdown, which reduces the risk to the economy albeit at an increased risk to health.
The SP 500 index rose 1.16 to reach a new record close of 3,626.91. Its now up 12.3 YTD 32.9 for the NASDAQ!!, which is rather surprising to me given the collapse in economic activity. It just goes to show that when it comes to stocks, dont fight the Fed is the key to making money.
However, reactions in the FX market were muted, with only the usual riskon trades. Nothing much to say on that front in fact as there werent any major movements and no glaring anomalies that need explaining.
With two vaccines now possible, Fed Vice Chair Clarida yesterday was more positive than Fed Chair Powell was in the latters comments from the Sintra symposium last week. Clarida said he had always assumed a vaccine in formulating his baseline forecast for 2021, and now…