Summing up 2020: Major events of the past year

Congratulations, we’ve made it through 2020! This eventful year is almost over. Let’s take a moment to look back and recall its key events.

It’s difficult to even start to comprehend how much this expiring year has changed our lives. We are all wearing masks and washing our hands several times a day now. If someone told us back in 2019, that we wouldn’t be able to travel or even leave our house, we would laugh in their face. But we did face the lockdown and spent several months self-distancing, in isolation.

But apart from the much-hyped coronavirus, what other key events are worth considering? We believe that there were more…

Expectations are the first and foremost

Waiting

EURUSD

The influence of strong indicators of the labor market from the USA, issued on previous week, did not keep for a long time. On Tuesday, markets again tended to sell dollar. Eventually, by Friday the pair EURUSD reached 1.1250, getting back to the local lows of August. The released statistics calls our attention to the decline of labor efficiency in the USA and the simultaneous increase in expenses for the workforce. That is the evidence of hiring new employees by the companies. The efficiency grows when they fire people and replace them by programs. Therefore, the decrease is not such a more…

Clearer deflation in Europe

EUR/USD

The EU inflation keeps slowing down. The most important news here came yesterday from Germany, which didn’t see any price growth in November after the decline by 0.3% a month before. Yet, the annual inflation rate dropped to 0.6%. Last time inflation was that low at the end of 2009 because of the economic meltdown and cut in consumer spending. Now the situation is a bit different. The unemployment level is the lowest since the time of Germany’s reunification, as was shown in the employment report for November. Besides, it was messaged that the number of the unemployed had decreased again more…

Asia is on the defensive

EUR/USD

The single currency continued its trip up on Monday. As a result, it reached a high of 1.2440. Ifo Business Climate proved to be better than expected and grew for the first time since April, while had been expected to fall. The index grew from 103.2 to 104.7 against the expected 103.0. Both the components of the index rose – Current Assessment and Expectations. Under such conditions growth of the single currency could be stronger, but it didn’t happen because of the pressure the euro suffers from the expectations of a more active extension of the ECB’s balance for the sake more…

FOMC faces headwinds

EUR/USD

USD fell under pressure yesterday after the release of the FOMC’s meeting minutes in October. Then the Committee stopped bond purchases, so market participants expected to see the discussion if it was reasonable in the minutes. Among the voting members there was only one dissident – Narayana Kocherlakota, who appealed for further QE until inflation reached the target rates. It is an extremely dovish position, but it was long known to the market and so didn’t arouse any surprise. The minutes were remarkable for comments that inflation would remain low for a while despite the large-scale quantitative easing, which was already more…