European stocks rallied on Monday following Joe Biden’s U.S. presidential election win. While Biden topped the necessary 270 Electoral College votes, President Donald Trump hasn’t conceded and has yet to mount a legal challenge.
In individual stocks, Societe Generale announced plans to cut costs, including cutting 640 jobs in France. The French bank’s stocks rose by nearly 4% following the news. Meanwhile, the Norwegian government said it will not provide additional financial support for Norwegian Air, leaving the company on the verge of bankruptcy and sending its stocks lower by more than 20% on Monday. ECB's Lagarde mainly commented on climate risks, nothing policy-related n her recent statement. On the data front, Eurozone November Sentix investor confidence came in at -10.0 versus -15.0 expected.
Against this backdrop, the UK FTSE 100 index rises 2.83% to 6,077, Italy’s FTSE MIB rallies 4.53 percent to 20,572, France’s CAC 40 edges lower by 0.60 percent to 4,953, while the German DAX 30 sheds 0.85% to 12,460. U.S. stock index futures rallied ahead of the opening bell on Wall Street, with S&P 500 futures being up 1.5% while Nasdaq futures gained 1.8%.
In currencies, the dollar turned mixed after a bearish week. EURUSD was rejected from mid-September highs around 1.19 but derived support from the 1.1860 figure and was negative on the day as of writing. Better-than-expected investor confidence data helped to prevent a deeper local correction in the common currency. Still, it looks like the pair may need the additional catalyst in order to challenge the mentioned barrier so that to retarget the 1.20 hurdle last seen in early-September.
Meanwhile, USDJPY bounced strongly from the March lows around 103.15 and regained the 104.00 figure. As of writing, the pair was changing hands around 104.30, slightly off intraday highs. However, as long as the dollar stays below the 20-DMA (today at 104.70), downside risks continue to persist. In the short term. On the other hand, further rally in risky assets could push the pair even higher amid weaker demand for the safe-haven Japanese yen.
In commodities, crude oil prices bounced up strongly on Monday after the Saudi energy minister said that the oil market was still stable despite Libya's return and new lockdowns. He also noted that the OPEC+ output deal could be extended if needed to be. Against this backdrop, Brent crude has accelerated the recovery and briefly exceeded the $43 handle before retreating slightly. As of writing, the futures were flirting with the 100-DMA. The prices need to stage a daily close above this moving average to confirm the latest bullish breakout.
Nathan Lambert, Head of Global FX Analytical Department