European Markets Jump as Brexit Deal Narrows.

European Markets Jump as Brexit Deal Narrows.


European stocks and sterling headed higher on Thursday as markets are convinced a Brexit deal is in sight following several news reports that one will be announced within hours.

 

The FTSE 100 (^FTSE) opened higher 0.2% in London. It will close at lunchtime as it is Christmas eve.

 

Sterling was also up 0.5% against the dollar (GBPUSD=X) at $1.3577 and 0.4% against the euro to above €1.11 (GBPEUR=X) in early trading in London.

 

Germany’s DAX (^GDAXI) is closed in Frankfurt while the CAC 40 (^FCHI) opened higher 0.2% in Paris.

 

US markets will also close early today due to the holiday. S&P futures (ES=F) were higher 0.2% and Dow Jones (YM=F) was also up 0.3%. The Nasdaq (NQ=F) gained 0.1%.

 

According to the BBC’s Laura Kuenssberg, an announcement on a Brexit deal could come on Thursday after “late-night wrangles over individual fish species (am not making this up)” she said on Twitter. Fishing has been a major sticking point in talks.

 

The easing of restrictions between the UK and France has helped ease UK markets after all air and road travel between the countries halted earlier in the week.

 

This follows news on Monday that Britain had a more contagious variant of COVID. Late on Wednesday, the UK government announced another variant had been discovered in the nation, leading to even more stringent Tier 4 restrictions on Boxing Day as COVID-19 infections continue to rise rapidly.

 

Investors largely overlooked US President Trump’s threats to veto the nearly $900bn stimulus bill, which was agreed upon after months of negotiations between Republicans and Democrats. Trump’s main issue is the stimulus checks, as he demanded that they increase from the proposed $600 allotment to $2000.

 

“Asian markets completely ignored the latter news yesterday, much to my surprise and European and North American markets did much the same,” said Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA. “The developments have sent Congressional representatives scrambling to vote for bigger cheques in some quarters, while marshalling forces to override the Presidential veto’s in others.”

 

Asian markets were steady at market close. Japan’s Nikkei (^N225) gained 0.5% at market close, the Hong Kong Hang Seng (^HSI) was up 0.2%, and the Shanghai Composite (000001.SS) was down 0.6%. South Korea’s KOSPI (^KS11) headed up 1.7%.

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