Daily summary: US stocks lack direction after disappointing claims report

• ECB cuts 2021 GDP forecast
• US weekly jobless claims surge
• US lawmakers approved a stopgap government funding bill
• US daily COVID deaths top 3,000 for 1st time
• Germany reports record daily COVID cases

European indices finished today's session mixed after the ECB decided to hold interest rates and to increase its pandemic emergency purchase program (PEPP) by €500 billion to a total of €1.85 trillion and extended the scheme by nine months to March 2022, but revised lower its growth projections for 2021. ECB expects the Eurozone GDP to expand by 3.9% next year, compared with its September forecast of 5%. Meanwhile, investors continued to focus on the COVID-19 situation, EU stimulus and the Brexit trade negotiations. EU leaders are expected to reach an agreement to unblock the EU’s €1.8 trillion financial package and agree on climate goals. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed to extend the talks until Sunday, after yesterday's meeting ended with no breakthrough for a trade agreement. On the coronavirus front, Germany has reported 23,679 new infections today, the highest number since the pandemic began. Other European countries also report an increasing number of new cases, with the UK announcing 16,578 new cases as of Wednesday, and France and Italy reporting 14,595 and 12,755 infections, respectively. DAX 30 fell 0.4%, CAC40 finished flat and FTSE100 rose 0.53%.

US indices managed to recover early losses as signs of progress on fiscal stimulus talks overshadowed disappointing weekly jobless claims which suggested a stalling recovery in the labor market. Initial jobless claims rose to a near three-month high of 853K as ever-increasing number of new COVID-19 cases caused more business restrictions. Meanwhile Treasury Secretary Mnuchin said talks between Republican And Democratic senators were making "a lot of progress" with more discussions expected in the day. Also the House of Representatives approved yesterday a one-week extension of federal government funding to give Congress more time to strike broad spending and COVID-19 relief deals. The US reported record number of 3,124 COVID-19-related deaths on Wednesday and total number of fatalities surpassed 289 thousand, according to Johns Hopkins University. On average more than 200k cases were reported each day over the past week, however the approaching holiday season could fuel another surge in infections.

US crude futures are trading 3.56% higher at $ 47.17 a barrel, while Brent contract jumped more than 3.50% to $ 50.50, level not seen since March as progress on the vaccine front lifted market sentiment. Pfizer/BioNTech coronavirus vaccine has been rollout in UK since Tuesday and it has been approved for use in Canada and is waiting for approval in the US. Elsewhere, gold futures fell 0.35% to $ 1,832.00 /oz, while silver is trading flat near $ 24.00/oz.

USDJPY – pair bounced of the lower limit of the tightening triangle formation which also coincides with the 50 SMA (green line) and 200 SMA (red line). Should the price break below the lower limit of the triangle formation, declines could deepen. In such a scenario, the 103.65 handle could be the first target for market bears. However, if buyers will manage to break higher, then upward impulse towards 104.78 could be launched. Source: xStation5