C$ vaults to 2-year high on vaccine news, Biden victory - Reuters News

Canadian dollar at C$1.2934 or 77.32 U.S. cents

Bond prices slip across the maturity curve

By Saqib Iqbal Ahmed

NEW YORK, Nov 9 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday to a more than 2-year high, as investors' appetite for riskier currencies surged following news of a promising coronavirus vaccine development.

At EST (1420 GMT), the Canadian dollar CAD= was trading 0.9% higher at 1.2934 to the greenback, or 77.32 U.S. cents. The currency's strongest level of the session was 1.2928, its strongest since October 2018.

Pfizer Inc PFE.N on Monday said its experimental vaccine was more than 90% effective in preventing COVID-19 based on initial data from a large study, a major victory in the fight against a pandemic that has killed over 1 million people, roiled the world's economy and upended daily life. (Full Story)

Pfizer and BioNTech are the first drugmakers to show successful data from a large-scale clinical trial of a coronavirus vaccine.

The news sent global stock markets and other risky assets soaring while safe-haven currencies such as the Japanese yen JPY= and the Swiss franc CHF= fell.

Risk sentiment was also supported by hopes of improved prospects for global trade after Democrat Joe Biden clinched the tightly-fought U.S. presidential election. (Full Story)

"The Canadian dollar smashed through the 1.30 mark this morning, gapping upward on a broad improvement in global risk appetite," said Karl Schamotta, chief market strategist at Cambridge Global Payments.

"Biden’s win and news of a potential vaccine are unleashing the “animal spirits” that drive economic activity - by making citizens more likely to spend and businesses more likely to invest, growth could accelerate materially into the winter months," he said.

The loonie was further helped by a big surge in the price of oil, Canada's largest export.

Oil jumped by almost 10% on Monday for its biggest daily gain in almost six months after news of the vaccine and on Saudi Arabia's assurance that an OPEC+ oil output deal could be adjusted to balance the market. (Full Story)

Canadian government bond yields were higher across the curve, with the 10-year CA10YT=RR up 8.7 basis points at 0.736%.

Euro zone investor morale worsens in November but beats forecast - Reuters News

BERLIN, Nov 9 (Reuters) - Investor morale in the euro zone fell for a second consecutive month in November but the drop was not as bad as feared because lockdowns imposed to curb the spread of the coronavirus did not hit the economy as hard as expected, a survey showed on Monday.

Sentix's index for the euro zone dropped to -10.0 in November from -8.3 in October. That compared with a Reuters forecast for a reading of -15.0.

"The renewed lockdowns in many EU countries have less impact than feared," said Manfred Huebner, managing director of Sentix.

He said this was likely due to positive developments in Asia and the United States, where there have not been drastic restrictions on economic activity.

The current situation index dipped to -32.3 from -32.0 the previous month. The expectations index decreased to 15.3 from 18.8, hitting its lowest level since May.

In Germany, the current situation index improved for the sixth consecutive month, hitting its highest level since March.

Expectations in Europe's largest economy dropped to their lowest level since May but Sentix said: "They remain positive, indicating that the economic recovery path has not yet been abandoned."

Sentix surveyed 1,114 investors from Nov. 5-7.

Rise in exports offers Germany hope of avoiding Q4 slump - Reuters News

Exports rise stronger-than-expected 2.3% m/m

Trade surplus expands to 17.8 bln euros

BERLIN, Nov 9 (Reuters) - German exports rose by more than expected in September, and foreign trade gave Europe's largest economy a boost going into the fourth quarter as it struggles to avoid slipping into a double dip contraction.

Seasonally adjusted exports rose 2.3% on the month after an upwardly revised 2.9% rise in August, the Federal Statistics Office said. Imports fell by 0.1% after a rise of 5.8% the previous month. The trade surplus expanded to 17.8 billion euros, the Office said.

Economists polled by Reuters had expected exports to rise by 2.0% and imports to increase by 2.1%. The trade surplus was predicted to come in at 15.8 billion euros.

"Looking ahead, exports (and industrial production) could still prevent the economy from falling into a second lockdown depression in the final quarter of the year," ING economist Carsten Brzeski said.

"With U.S. President-elect Biden, the threat of U.S. tariffs on European (read German) automotives should disappear," he added.

The economy grew by a record 8.2% in the third quarter on higher consumer spending and exports, but an aggressive second wave of infections and a new partial lockdown are now clouding the outlook for the fourth quarter and beyond. (Full Story)

Annual figures showed exports to China rose 10.6% from the previous September. Exports to the United States, which the Office said were particularly affected by the coronavirus pandemic, fell 5.8% on the year and those to the UK fell 12.4%.

A picture is emerging of German industry growing despite the pandemic, while services struggle. Industrial output rose in September, data showed on Friday. (Full Story)

A survey released last Wednesday showed that German services activity shrank for the first time in four months in October. (Full Story)

Germany closed bars, restaurants, gyms, cinemas, theatres and domestic tourism last Monday for a month to combat the spread of the coronavirus.