Here are the latest developments in global markets:

FOREX: The dollar was weaker versus a basket of major currencies during early European trading hours as investors played down the post-growth effects of the proposed tax cuts. The dollar index touched intra-day lows at 93.68 (-0.26%). Euro/dollar was on track to break above 1.1800, reversing most of its Friday’s losses (+0.31%), as sentiment on the Eurozone’s economy remained positive. Dollar/yen was flat at 112.56 and pound/dollar was trading higher at 1.3360 (+0.32%).

STOCKS: Merger and acquisition deals lifted European stocks on Monday. At 1100 GMT the pan-European STOXX 600 – driven by gains in the tech sector – was up by 0.82%, trading near six-week high levels, while the blue-chip Euro STOXX 50 jumped by 0.75%. The German DAX 30 climbed by 1.40%, the French CAC 40 rose by 1.18% and the British FTSE 100 increased by 0.40%.

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COMMODITIES: Oil prices extended their uptrend as the British North Sea pipeline remained closed and a strike by Nigerian oil workers on Monday raised fears over a potential restriction in Africa’s oil production and exports. A fall in US oil drilling rigs reported by Baker Hughes on Friday also supported the market. WTI crude rose by 0.31% to $57.48 per barrel and Brent moved up by 0.22% to $63.37. Gold rose by 0.30% to $1,259.00 per ounce.

Day ahead: May to propose plans on transition period

The UK Prime minister, Theresa May, will meet with her Cabinet today to inform ministers on the latest developments in negotiations with the EU in Brussels. She is also expected to report her plans on the transition period which aim to help individuals and businesses to smoothly adjust to post-Brexit conditions; She is anticipated to say that the UK will not be part of the union during the transition period. Note that May accepted the EU’s offer to begin trade talks only after March and give priority to transition deal discussions at the EU’s summit last week. Still, internal preparations on future relations could begin before then.

In the US, investors are looking forward to the crucial tax vote in the Congress as soon as this Tuesday, pricing that the promised-by-Republicans tax cuts might turn into law in the coming days or early next year. Yet some uncertainty remains on the post-growth effects of the bill, while markets are also wondering whether the US lawmakers will be able to pass the bill before the year-end as some Senate Republicans are currently facing health issues.

Moreover, the clock is also ticking down for government spending which expires on December 22, spreading fears of a potential government shut down if the Republicans fail to extend the budget beyond the deadline.

In the US president, Donald Trump, will reveal his national security strategy on Monday with sources familiar with the matter claiming that Trump will likely propose a tougher stance on China, underlying his concerns over the US-China trade relations.

In terms of data, the NAHB housing market index for the month of December will be out of the US at 1500 GMT. The index approached 13-year high levels the previous month, rising to 70.

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