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Here is what you need to know Friday 11th December:

  • Investors remained focussed on stimulus talks and the Brexit deadlock while temporarily distracted by the European Central Bank meeting. 
  • The single currency rose on Thursday which pressured the greenback as the European Central Bank rolled out yet more stimulus measures to lift the currency bloc out of a double-dip recession.
  • World equity benchmarks fell following an increase in weekly US jobless claims while there are still no signs of progress in fiscal stimulus talks to buttress the economy.
  • However, there was a late headline that the US Treasury Secretary Steven Mnuchin said talks between Republican and Democratic senators on COVID-19 relief were making “a lot of progress” with more discussions expected in the day.
  • Markets were expecting the Senate to extend government funding by one week on Thursday to give lawmakers time to work out a larger spending package and coronavirus relief. However, House Speaker Nancy Pelosi threw a spanner in the works when she said that there was a possibility that talks could drag on through Christmas.
  • The US Food and Drug Administration (FDA) was meeting to decide whether to recommend that the agency authorize Pfizer Inc’s PFE COVID-19 vaccine for emergency use. Some officials said vaccinations could begin as soon as this weekend if the FDA consented.
  • UK Prime Minister Johnson and EU President von der Leyen meeting ended without an agreement on Wednesday night and negotiations are expected to go on until a new deadline agreed for Sunday. 
  • British Prime Minister Boris Johnson said on Thursday there was “a strong possibility” Britain and the EU would fail to strike a new trade deal.
  • In forex, EUR/USD dip buyers have been rewarded. Bulls had otherwise made progress but with limited traction as the ECB said it was monitoring the single currency. 1.2158 was the day’s high. GBP/USD bulls have little shelter from Brexit bombs and recoveries fro the 1.3245 lows have been faded around 1.3320. AUD/USD bulls have been enjoying a dip in the US dollar and rising commodities and the price rose to a fresh cycle high of 0.7538 in a strong series of two bullish daily candlesticks. USD/JPY’s sluggish recovery was diverted by the poor jobless claims and covid spread and still no signs of any stimulus agreement. 
  • The US 10-year yield shed 1.7bps to 92.0bps. Oil prices jumped, supported on the fresh stimulus hopes with WTI up 3.5% to $47.1/bbl. Gold lost 0.1% despite dollar weakness to $1,834.1/oz.
  • Cryptocurrencies were sideways in the main with BTC/USD giving back gains and down some 0.93%.