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Day Ahead: Top 3 Things to Watch for Dec. 13

Published 12/12/2019, 02:26 PM
Updated 12/12/2019, 06:17 PM
© Reuters. - Here are three things that could rock markets tomorrow.

1. Trade Deal Fallout

Wall Street jumped today following the reports of the U.S. and China agreeing to a phase one trade deal, but the follow-up reports that President Donald Trump had signed off on it came after the close of trading.

That could mean further follow-through for U.S. equities tomorrow as details (and more speculation) emerge. Asia was set to jump at the start of trading with Nikkei futures up 1%.

European shares could also be more active as the Trump Administration appears to be anxious to wrap up at least partial deals on trade battles it initiated.

The dollar will also be active as the trade deal comes into focus. A legal text hasn’t been finalized.

China will buy more U.S. agricultural goods and there will be discussion about reducing tariffs on Chinese goods by as much as half, Bloomberg reported.

China’s subsidies of areas of its economy will be put off for a later time, but intellectual property will be part of it, Bloomberg said.

2. Trade Sights on Sterling

Exit polls in the U.K. general election point to a landslide victory for the ruling Conservative party, paving the way for Prime Minister Borish Johnson's Brexit deal.

GBP/USD surged 2.1% shortly after the polls came out. EUR/GBP was off 1.75%.

The Conservatives are predicted to win 368 seats, with opposition Labour taking 191 seats, the Scottish National Party with 55 seats and the Liberal Democrats winning 13 seats.

That would be the highest number of Tory seats since 1987 and the lowest number of Labour seats since 1935.

Expect Brexit sensitive stocks in both London and the European exchanges to see increased vollume.

3. Retail Sales Eyed

The Commerce Department is due to release figures on November retail sales. And many are keen to see whether the U.S. consumer remains in good shape, with the holiday season, a crucial period for retailers, now in full swing.

On average, economists expect that retail sales rose 0.5% last month and that core retail sales, which exclude automobile sales, rose 0.4%.

The retail sales control group – which has a larger impact on U.S. GDP – is expected to again rise 0.3%, the same as the month before.

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