Week in a Glance: Moderna, Bitcoin, US Stimulus and Brexit

The agenda on financial markets last week did not change much: they continued to monitor long-term projects (Brexit and US stimulus), rejoiced at new vaccines (this time from Moderna), watched the continuation of Bitcoin's movement into outer space, as well as ultra-soft monetary policies of the leading central banks (FED, Bank of England and Bank of Japan) and new pandemic records.

There were no radical changes in market sentiments last week: the level of fear (VIX index) continued to remain at the lowest levels since the start of the pandemic. This means that the demand for risky assets prevailed in financial markets: stock markets and commodity markets demonstrated growth, but the greatest activity was recorded in the cryptocurrency market. In a couple of days, Bitcoin added about 20% to its price and updated historical highs. However, the higher you climb, the more painful you will fall. The last two Bitcoin bubbles bursts, with over 80% loss in value, began in December. So, do not be surprised if something unimaginable happens on the cryptocurrency market already this week.

Oil grew last week. It was not stopped even by the rather gloomy prospects for the oil demand from both OPEC and EIA, which simultaneously worsened their own forecasts in their monthly outlooks. Again, if we believe that the likelihood of fixing profits at the end of the year is high, then this week oil, like the stock and crypto markets, may undergo massive sales.

Or maybe not. The fact is that news about vaccines is consistently setting the market in a positive way. Another vaccine was approved in the US last week. This time from Moderna. That is, by the end of the month, 10-20 million people can be vaccinated in the United States. In addition, the markets were looking for a positive and found in the news about the stimulus package for the United States.

On Sunday, Democrats and Republicans managed to reach an agreement, and today vote for a package of $ 900 billion is due.
All week the attention of traders in the foreign exchange market was riveted on the news from the negotiation process between the UK and the EU. On Sunday there was a deadline, after which MEPs will no longer vote anything until 2021. Despite the statements about a breakthrough in the key issue of fishing, the parties do not have a deal yet and plan to continue negotiations today.

The pound opened with a gap down today as a new type of the coronavirus was discovered in the UK. According to preliminary data, it is 70% more infectious. In Europe, countries are starting to restrict air traffic and are thinking about other measures to isolate them from the UK.

The coming week will be half-holiday. Accordingly, there will be few fundamental events. But the combination of overbought and thin market at the end of the year is a highly explosive mixture. If ever there is a flash crash, it's this week. So, we are preparing for the most powerful corrective movements this week.