Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Deals Remain Elusive As Markets Wait

Published 12/18/2020, 06:42 AM
Updated 07/09/2023, 06:31 AM

Asia and the EU

  • EUR IFO 92.1 vs. 90

US

Markets were generally quiet as the two big deals on both sides of the Atlantic remained elusive.

In Washington DC the prospects for a stimulus package remained strong, but lawmakers continued to negotiate without a firm deal yet. In Brussels the Brexit deal continued to be mired in obstacles surrounding fishing rights and officials were making anxious comments about being “far apart” which weighed on the pound in morning London dealing with the pair testing the 1.3500 level before bouncing a bit.

Overall sentiment remains positive on both fronts as markets believe all parties will ultimately reach a deal. The two stories are key drivers of risk on moves and as we noted all week long the massive rallies in both equities and high beta FX have been underpinned by the assumption that Brexit and stimulus are done deals.

For now that remains operating principle and given the massive stakes in each deal the likely outcome for both. But with price action so heavily skewed to the upside and positioning clearly stretched we certainly have scope for a correction into the year end so the risk remains to downside as both FX and equities could see a “sell the news” reaction.

The eco calendar is barren today save for Canadian retail sales and the focus will be squarely on headlines from DC as well the quadruple expiration in equity and derivative markets as Tesla (NASDAQ:TSLA) is added to the S&P 500. Both the size and the volatility of the stock could create lots of price insensitive moves that could exacerbate the action into the close of the week.

Happy holidays to all.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.