Brexit deal and the stimulus package are pushing
Brexit deal and the stimulus package are pushing most of the markets higher…Oil is suffering alone
Brexit deal and the stimulus package are pushing : After months of negotiation,
the European Union and the United Kingdom finally made concessions that would ensure a close relationship
after the end of this year, because of the final agreement.
Britain’s exit from the European Union with no agreement would have caused the first to face great difficulties as expectations indicated that more than 300,000 jobs could be lost in the country, as companies moved to the European Union.
On the other hand, US President Donald Trump signed a stimulus package of $ 900 billion,
which means providing the necessary funds for individuals,
small and medium enterprises in order to be able to face the consequences of Corona.
This package should provide support to the sectors most affected by the epidemic,
such as the Aviation sector, which is going through its worst days this year.
How did this news affect trading in world markets?
Evest touches on the prices movement through the following lines.
Oil is still suffering
Crude oil prices declined today, as it is still affected by news related to the wide spread of the new strain of Corona virus,
Covid-19, extensively around the world.
The price of February Brent crude oil futures has recorded $ 51.14 a barrel,
which is $ 0.15, to 0.29% below the closing price of the previous session.
Brent contracts rose by $ 0.09, to 0.2% to reach $ 51.29 a barrel last Thursday.
On the other hand, the price of WTI futures decreased for a month to $ 48.16 a barrel,
which is less than the previous trading level of about $ 0.07, by 0.15%.
West Texas crude futures rose by $ 0.11, to 0.2%, recording, $ 48.23 a barrel on Thursday.
Overall, Brent crude fell 1.9%, Texas Intermediate oil fell $ 2.1%,
and it recorded the weekly decline in oil prices for the first time since the week ending in 30 October.
During November, the price of oil significantly jumped-by a quarter- because of the optimism about the Corona virus vaccine,
which would help in the recovery of the world economy and demand.
Since the beginning of December, oil prices have so far shown a more moderate growth of about 6%.
The new strain spread in a number of countries, starting from the UK, and reaching Canada, France, Japan, Norway
and others, which weakened sentiments again.
This also increased fears of slowing of oil demand growth.
Gold rises with the support of the stimulus package
Gold prices rose today by 1%, after US President Donald Trump finally signed the bill for the country’s general budget in 2021,
which amounts to $ 2.3 trillion.
According to CNN, the budget includes a $ 900 billion as a stimulus package to support the economy and the relief of Corona virus,
and about $1.4 trillion in government spending to fund Federal Agencies.
In his statement on his decision to sign the bill, Trump said that the House of Representatives of Congress will vote on Monday to increase direct payments to Americans from $ 600 to 2.000 per person.
Approval of this package would help distribute checks and loans to individuals and small companies,
in addition to, funds to help launch of the vaccine to face the effects of the pandemic.
Gold prices rose by 1% to $ 1.900 before giving back some of the gains, trading near $ 1.885 an ounce.
The decline in the US dollar supported gold, as the dollar index which measures the performance of the green currency against a group of 6 major currencies, fell to its lowest level in a week to reach 90.10.
On the other hand, traders now prefer gold due to the increased financial facilitations measures undertaken by central banks around the world so as to support the falling economy, especially with the continued development of the epidemic situation around the world, and the widespread uncertainty about whether vaccines will be able to cope with the discovered new strains, and it will limit its spread or not.
Asian and European markets start the week in the green area
Evest is monitoring the developments in markets, as European stock markets head towards a positive opening today,
and the American stimulus package supports this market, which has suffered during last week after Trump’s threat to reject the package.
According to expectations published by Reuters, the German DAX index may add to it 64 points,
while the French CAC index may gain 23 points, and the British FTSE index may gain 38 points.
In general, European stock markets were closed in the green area during the last trading weekly sessions on last Thursday,
while the markets were closed on Friday due to the Christmas holidays,
and the support for reaching an agreement between the UK and the European Union market,
but the British house of Commons will vote on the decision on 30 December,
this will mean more support for the European stock market.
According to the news of agencies, both British Prime Minister Boris Johnson and The European Commission President Ursula Von der Leiden held telephone consultations today, and the deal is to be announced later.
For his part, Irish Foreign Minister Simon Coveney said that there was a last-minute hurdle in terms of drafting fishing rights.
On the other hand, Asian stock markets rose on last Monday after President Donald Trump signed the aids package,
which helped in reducing uncertainty as governments re-imposed restrictions on travel and business in response to the new Corona virus strain.
Shanghai, Tokyo and Hong Kong stocks rose as traders resumed work after the three days of Christmas’ holiday.
The Shanghai Composite index rose to 0.3% to 3.406.6 and the Nikkei in Tokyo rose to 0.5% to 26.798.62 points.
Hong Kong’s Hang Seng Index rose less than 0.1% to 26.391.20.
In Seoul, Kospi Index rose 0.4% to 2.817.79, while Indian Sensex opened rising to 0.06% at 47.230.55 points.
In the US, the stock market closed on a slightly higher on Thursday.
The Dow Jones Industrial Average rose 0.23% to 30.199.87 points, and the Standard & Poor’s Index rose 0.35% to 3.703.06 points.
As for the Nasdaq 100 Technology Index rose by 0.46% to 12.711.01points.
Overall, there was little movement with weak volumes.
In the currency market, the weak dollar contributed to raising many other currencies against it,
as investors bet on an ongoing recovery in the global economy and a prolonged period of more US accommodative monetary policy.
The British pound is trading against the US dollar, at 1.3552, which is slightly higher than the lowest level it hit last week at 1.3530.
The Euro rose against the US dollar, as it is trading at 1.2210, higher than last week’s low of 1.2930.
While the US dollar reached 103.42 against the Japanese yen.