FX Update: The DXY dollar index edged out a 32-month low

FX Update: The DXY dollar index edged out a 32-month low at 91.66, and is set to close out November with its second biggest monthly loss in almost two years. The decline has been concomitant with the vaccine-optimism rally in global asset markets, which catalysed a rotation in cyclical stocks and industrial commodities. The MSCI World Index is set for a record gain in November. Many European equity markets are also set to rack November up as a record month of gains, with Italy's MIB up nearly 26% and France's CAC up 21%, beating even Japan's Nikkei, which closed out the month of November earlier with a net 15% advance. High tech stay-at-home growth stocks, after surging for much of the year, underperformed. The Nasdaq is up 11% in November, while the FAANG stocks are up by less than 7%. Sovereign bond yield have perked up, and would 'normally' be a lot high if not for being being reined in by central bank asset purchase programs. While stock markets have turned lower today, copper futures have still rallied to a fresh seven-year high, while Aluminium prices posted a new two-year high, and zinc an 18-month peak. This came with China's official manufacturing and non-manufacturing PMI for November coming in above expectations at 52.1 and 56.4, respectively, with both rising on the October readings. The manufacturing figure was a highest since September 2017 while the non-manufacturing number was the best level seen since July 2012, highlighting the strong recovery in the Chinese economy from the Covid pandemic lows. Ahead in December, there is potential for a pause in the global asset rally, with the latest BoA global find managers' survey finding that cash holdings at fund managers are now down to pre-pandemic levels. December has a reputation for being a down month, too, due to year-end capital tax gains (although this pattern hasn't held up too well in recent years). A sharp focus remains on Brexit. The UK foreign secretary said on Sunday that the EU and UK are entering the "last week or so" of substantive negotiations, and that a deal was in "touching distance." Fishing remains a key sticking point, though France's insistence that the current arrangement remains in place, which gives the UK on 18% of the catch from its own waters, is seen as unreasonable -- not just by the UK, but by many other EU states.