Santa-Boris arrives just in time

Santa-Boris arrives just in time - MarketPulseMarketPulse


Home/Central banks/COVID-19/News events/Newsfeed/US election

Share 0

Financial markets picked themselves up and dusted themselves of overnight, after a torrid week. Sentiment improved after headlines started appearing that the United Kingdom and European Union have finally reached a provisional Brexit trade agreement. In the United States, weekly Jobless Claims fell to just over 800,000, a much lower fall than forecast, although personal spending and income fell more than expected as Covid-19 extracted its pound of flesh.

President Trump pardoned his son-in-law’s dad, vetoed the defence spending bill, and threatened to veto the combined fiscal stimulus/government funding bill for 2021. His main gripe is that the direct payments to Americans were too small. Asian markets completely ignored the latter news yesterday, much to my surprise, and European and North American markets did much the same. The developments have sent Congressional representatives scrambling to vote for bigger cheques in some quarters, while marshalling forces to override the Presidential vetoes in others.

The bluff and double bluff mishmash in Washington DC hasn’t dented sentiment one iota from a markets perspective. Equities, energy and precious metals all rose, and the US dollar fell, in a typical buy-everything day. On deeper thought, it could well be that a large net fiscal response could emerge when the dust settles. The primary reason for that being the Georgia double-header Senate run-off in the first week of January. That will decide control of the Senate, and recalcitrant Republicans Senators may not want to be tarred as the grinches who stole Christmas ahead of that crucial election.

Brexit optimism boosts pound

A potential Brexit deal saw sterling roar back to life, rising 1.02% to 1.3490. Sterling has risen another 0.50% to 1.3550 in Asia today, with UK press saying that PM Johnson will address the nation at 1100 LDN time today. The announcement by Santa-Boris comes in the nick of time. Still, it leaves the UK isolated internationally due to Covid-19, with thousands of trucks marooned on each side of the English Channel, and follows more of England’s regions being moved into a hard tier-4 lockdown. With Christmas in England starting to resemble one reminiscent of the wartime blitz, it is perhaps not surprising that sterling’s bullish reaction is underwhelming. Not helping is that the world is long enough sterling to fill in the English Channel.

Jack Ma’s woes appear to be continuing in Asia today. Chinese authorities are announcing that they are investigating Ali Baba for monopolistic behaviour. Ali Baba shares fell over 5.0% this morning, and although market sentiment as a whole is positive today, mainland and Hong Kong equities are likely to pause for thought. The US administration perversely will be watching with interest as bi-partisan support grows in the US for more controls on big tech. More aggressive legislation is passing through Russia’s Parliament to reign in Facebook and Google as well.

Reports that Alphabet had asked AI researchers inside the company to paint smiley emojis on their AI research won’t be helping their cause. Although not a story for this year or the first part of the next, I can’t help but suspect that 2021 will be big tech’s Standard Oil year. If the Democrats somehow win both Georgia primaries, my big tech bashing meter will swing to 100% and stay there.

The global data calendar is, unsurprisingly, offering no stocking fillers as much of the world heads into a Christmas Eve half-day. Singapore Industrial Production presents a threadbare stocking filler, with November YOY industrial Production expected to jump to around 10% after falling -0.90% in October.

Barring any surprise headlines, the overnight developments on both sides of the Atlantic should be enough to ensure that Santa drops buy-everything, global-recovery rallies into investors’ Christmas stockings to finish the shortened week.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.

Jeffrey Halley

Latest posts by Jeffrey Halley (see all)

Original author: Jeffrey Halley


© MarketPulse

Asian equities rise on Brexit optimism
Flipclutch Research: The feast of Hologram hits, w...

By accepting you will be accessing a service provided by a third-party external to https://chatpips.com/


Broker Search

Latest Spot Rate

19 January 2021
Canadian dollar dips on mixed data - MarketPulseMarketPulse Home/FX/Newsfeed Share 0 The Canadian dollar is down slightly in the Monday session. Currently, USD/CAD is trading at 1.2759, up 0.22% on the day. Short squeeze boosts US dollar The week end...
19 January 2021

19 January 2021
Aussie dips below 0.77 line - MarketPulseMarketPulse Home/Central banks/COVID-19/FX/News events/Newsfeed/Technical analysis Share 0 The Australian dollar has started the new trading week with slight losses. AUD/USD is currently trading at 0.7681, dow...
18 January 2021
Quiet start to the week - MarketPulseMarketPulse Home/Central banks/COVID-19/News events/Newsfeed/Treasuries Share 0 A quiet start to the week, with the US bank holiday meaning trading is likely to remain extremely thin throughout the session. Europe...
18 January 2021
Oil slips while gold ticks higher - MarketPulseMarketPulse Home/Commodities/COVID-19/Metals/News events/Newsfeed/Oil/Technical analysis Share 0 Oil seeing more profit-taking We may be seeing a little profit-taking in oil prices after a remarkable run...
How It Works | About | Contact | Contributors | Privacy Policy | Advertise
© 2009 - 2021 ChatPips. All Rights Reserved. Terms of Use: The content on this website is solely for educational and informational purposes and is not a substitute for official documentation of the original owners. Daily economic news is provided by third-party website. This site is not operated by, sponsored by, endorsed by, or affiliated with any parties in any way. The website owner, the authors, the publishers, and all affiliates of ChatPips.com assume no responsibility or liability for your trading and investment results. You should always check and confirm with several sources with your licensed financial advisor and tax advisor to determine the suitability of any investment before making your final decision. Your continued usage and browsing of information on this website constitute your agreement to this Terms of Use. If you do not agree, please do not proceed to use this website. Brokers Directory: The companies license information were obtained from respective local jurisdiction. All other company and/or product names are trademarks and/or registered trademarks of their respective owners.