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Growth holds higher ground

Growth holds higher ground

Markets maintained their vaccine inspired pro-growth stance in overnight trading. Crude, copper and iron all rose, and the Nasdaq hit new record highs despite late wobbles. The US dollar continued its slide and higher beta currencies rose. The risk on tilt failed to inspire Asia Pacific traders, and futures markets are pointing to opening losses across the region.

Pfizer released an update late in the US session. A supply chain issue saw the vaccine manufacturer cut estimates of shipments this year from 100 million to 50 million doses. The news initially saw US stocks trim gains, but given the short time frame and the fact production is pushed into next year the market impact is probably immaterial.

Perhaps more concerning for enthusiastic investors is the support for haven and alternative assets. Bonds, gold and cryptocurrencies all rose. While US weakness no doubt helped, the gains suggests not all investors are convinced the growth rally has legs.

Overnight reads on US services and composite PMIs for November showed ongoing expansion, and helped bolster sentiment. Traders are eagerly anticipating tonight’s non-farm payrolls release. Analysts expect 475,000 new jobs, pushing the unemployment rate to 6.8% from 6.9% previously. This key indicator of economic health could set the tone for trading next week.