LONDON / SYDNEY (Reuters) – Shares of the stock market started the week on strong gains as investors offered opportunities for US financial and monetary stimulus, while the British pound expanded into a last resort for Brexit negotiations.
Europe raised its stake by 0.75% and the euro against the dollar [.EU] After London and Brussels agreed to “go the extra mile” on Sunday to try to reach a trade deal.
“We are going to offer every opportunity for this agreement … it is still possible,” EU Brexit negotiator Michael Barnier told reporters before renewing the ambassadors of the 27 EU countries on Monday.
“Two conditions have not yet been met. Free and fair competition … and an agreement to ensure mutual access to markets and waters. It is at these points that we do not find the right balance with the British. So we continue to work.”
Advances in corona virus vaccines have also fueled a sense of danger, with the first shipment being shipped across the United States as part of an effort to vaccinate more than 100 million people by the end of March.
“It provides a tailwind to the vaccine market and allows investors to look beyond ongoing litigation, hospitalizations and deaths,” JPMorgan analysts said in a note.
E-mini futures for the S&P 500 responded up 0.5%, while the Treasury bond futures fell 4 ticks in March. EUROSTOXX 50 futures added 0.5% and FTSE futures added 0.1%.
Outside Japan, the broader index of MSCI’s Asia-Pacific shares rose 0.1% to a record high last week.
Japan’s Nikkei was up 0.3% in the December quarter, according to a study that improved sentiment among Japanese businesses.
Sterling’s big traffic of the day, gaining both the euro and the dollar, seemed to evaporate the chances of a Brexit deal last week, reviving it.
Against the dollar, the pound was up 1.5% at 3 1.3382. The euro fell 0.9% to 90.73 against the UK currency, up from 92.29 in the previous three months.
“Even in the face of increased rhetoric, we continue to think that a deal is a very credible outcome,” said Gilles Mock, chief economist at AXA Group.
At this point, failure could probably result from the envelope being pushed a short distance from Brussels or London, delaying the finalization of a contract on time.
“From this point of view, it is positive in our view that no new deadline has been set in the recent round of talks.”
Analysts at Goldman Sachs said in a statement that it could rise to 96 96.00 a pence; A contract will send 87 87.00 to the euro.
FED AHEAD
The single currency is already rising against the US dollar, and many analysts are entering a cycle of decline as the prospect of a vaccine-driven global economic recovery reduces the need for safe havens.
The euro rose 0.3% to 21 1.2150 on Monday, from its latest 31-month high of 17 1.2177. The dollar index was at 90.622, close to its latest high of 90.471.
An additional barrier to the dollar will be the Federal Reserve policy meeting on December 15-16. Rather than buying more securities or “twisting” its portfolio to add to its long-term debt, the market expects the Fed to refine its policy forward direction.
The Bank of England on Thursday and the Bank of Japan on Friday will conclude their meetings of the central banks this week in 2020. Before that, it sees global Flash BMIs on Wednesday and China’s monthly database on Tuesday.
“There is a risk that the central bank will make a surprise turn at this meeting, and then the Treasury mobilize and the US dollar may fall,” said Tabas Strickland, NAB’s director of economics.
After a top Democrat pointed out that a compromise was possible to reach an agreement that would pass Republican objections, the prospect of a US deal on fiscal stimulus is further summed up.
The $ 908 billion relief plan could be split in two and begin approval Monday, Reuters reported.
Trigger talk helped put a base under gold, which was $ 1,836 an ounce. Gold has risen more than 21% this year.
Oil prices rose on Monday; It has now accumulated straight for six weeks as investors set a price for next year’s global recovery. [O/R]
US crude was up 33 cents at $ 46.90. Brent crude futures rose 39 cents to $ 50.36. Iron ore has risen 21% since early December, though less than 2%.
Deutsche Bank analysts said it may be due to a call by a group of China’s leading factories to officials to investigate the ore rally after allegations of illegal activities.
Report by Mark Jones, editing by Larry King