News

Pound Holds Steady, Brexit Talks Eyed

GBPUSD

The British pound continued to trade under pressure on Brexit headlines. Investors are awaiting a breakthrough in the trade talks which would set the relation between the United Kingdom and the European Union in the future. Both sides are still struggling to compromise on fisheries, competition rules, and governance of their deal. Boris Johnson will be traveling to Brussels to meet with the European Commission chief Ursula von der Leyen after failing to reach a deal following two phone calls. The GBPUSD is trading near $1.3350, and the EURGBP held steady above 0.9050.

USD

The dollar index, which measures the performance of the United States dollar against a basket of major currencies, inched higher to 90.93, trying to recovery partial losses. The flow to riskier currencies during the past week weighed on the index, driving it to its lowest levels since 2018. Moreover, the rising chances of further stimulus especially following the disappointing jobs report weighed on the buck. The Brexit struggle is affecting the flow to riskier currencies such as the pound and the euro, giving the dollar room to breathe.

Equities

US stock benchmarks had mixed performance yesterday with Nasdaq rallying to record while the Dow Jones and S&P500 retreating from their tops. Market participants are awaiting further clues on the possible fiscal stimulus package, while also waiting for whether the FDA will approve Pfizer's vaccine this week. The Dow Jones Industrial Average future eased to 29933, the S&P500 dropped to 3674, while Nasdaq futures hovered near 12580.

Metals

Precious metals prices raced higher as chances of having further stimulus grew. Japan is looking to unveil a new stimulus package, while also the European Central Bank and EU leaders will meet later this week for recovery fund, and monetary policy. Also, in the United States, the latest jobs report is adding pressure on policymakers to act fast. The price of a gold ounce rose to a two-week high of 1871, the price of a silver ounce rallied to $24.78, and Palladium futures hovered above $2300.

Oil

Oil prices drifted lower amid concerns over a slowdown in the economic recovery. The latest US jobs figures signaled that the economy could be recovering more slowly than expected. Moreover, the coronavirus cases continued to soar worldwide, adding the chances of adopting movement restrictions again. The West Texas Intermediate crude January delivery fell to $45.13, and Brent Blend February delivery dropped to $48.11.

 

Major Economic Events

GMT Country Event Expectation Previous

10:00

EZ

 German ZEW Economic Sentiment (Dec)

45.0

39.0

10:00

EZ

 GDP (QoQ) (Q3) 

12.6%

12.6%

21:30

US

 API Weekly Crude Oil Stock

-

4.146

 

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