Markets should benefit from the arrival of a vaccine in the US and the continuation of Brexit negotiations 
 
Eurostoxx 50 3.485.84 points -1.04% 
CAC 40 5.507.55 points -0.76% 
DAX 30 13.114.30 points -1.36% 
FTSE 100 6.546.75 points -0.80% 
MSI 10.391.76 points -0.04% 
AEX 614.46 points -0.59% 
BEL 20 3.649.74 points -0.83% 
IBEX 35 8.063.10 points -1.46% 
 
DJIA 30.046.37 points +0.16% 
Nasdaq 12.377,87 points -0.23% 
S&P 500 3.663.46 points -0.13% 
 
Nikkei 225 26.732.44 points +0.30% 
 
Exchange rate at 06:50 
Change from the close in New York 
 
EUR/USD 1.2140 +0.23% 
EUR/JPY 126.29 +0.25% 
USD/JPY

TO FOLLOW IN FRANCE

Groupe ADP, the operator of Paris airports, published its November traffic figures on Monday.

ACTIONS

European equity markets should be supported on Monday by the imminent launch of the Covid-19 vaccination campaign in the United States and the continuation of Brexit negotiations.

At 7:40am, the CAC 40 futures contract gained 31 points, or 0.6%, according to data from the broker IG Markets. The DAX 30 contract increased by 70 points, or 0.5%, and the FTSE 100 contract garnered 5 points, or 0.07%

The deployment of the vaccine from Pfizer and BioNTech laboratories in the United States, which received emergency use authorization from the American health authority, the Food and Drug Administration (FDA), over the weekend, should begin this Monday, bringing food to the mill of optimistic investors and overshadowing the lack of progress in negotiations on a recovery plan and the rise in Covid-19 cases in the country.

The British FTSE 100 index is likely to face some resistance on Monday, due to the appreciation of the pound after the leaders of the United Kingdom and the European Union (EU) decided to extend their discussions to try to find a compromise on a post-Brexit trade deal.

Representatives of both sides said that differences on the issue at the heart of their dispute, namely to what extent the UK will be bound to EU standards in return for a free trade agreement with its main trading partner, were dwindling. The trade concerned represents nearly 900 billion dollars per year.

Sunday was the deadline set by British and European leaders for reaching an agreement, or else a “hard” Brexit would occur on 31 December.

Investors also continue to monitor negotiations in the United States between Democrats and Republicans on new measures to help businesses, households, and local governments deal with the economic impact of the epidemic. Parliamentarians, like the White House, are in favor of a plan worth around $908 billion, but disagreements remain on key issues such as the scope of local government assistance and legal protection

On Friday night, Wall Street closed in a contrasting manner. Buoyed by strong growth in Disney shares, the Dow Jones Index (DJIA) managed to gain nearly 0.2% to 30,46.37 points, but the broader S&P 500 index fell 0.1% to 3,663.46 points. The Nasdaq Composite fell 0.6% to 12,377.87 points. Over the week as a whole, the Dow lost 0.6%, the S&P 500 lost 1% and the Nasdaq 0.7%

In Asia, markets moved in mixed order on Monday. In Tokyo, the Nikkei index closed up 0.3% and the leading Chinese stock index, the Shanghai Composite, gained 0.5% at the end of the session. In contrast, the Hang Seng on the Hong Kong Stock Exchange dropped 0.6%

BONDS

US Treasury bond yields fell on Friday as investors worried about the lack of progress in negotiations on the US stimulus package and Brexit.

The yield on the ten-year Treasury note fell by 1.5 basis points to 0.892%. Over the week as a whole, the market benchmark lost 7.5 basis points, marking its biggest weekly drop since June, according to Dow Jones Market Data data

CHANGES

Sterling rose sharply against the dollar and the euro after the United Kingdom and the European Union agreed to continue discussions on a post-Brexit trade deal.

According to CBA, the pound could fall to $1.28 in the short term, from around 1.332 on Monday morning, in the absence of an agreement and expectations for British interest rates would be significantly reduced in this case. The British currency may recover to $1.36 if an agreement is reached, CBA adds

The dollar fell against most other major currencies, including the euro, on Monday and could weaken further this week as financial markets focus on improving the medium-term economic outlook.

The Federal Reserve (Fed) is expected to leave its policy rate unchanged on Thursday, but some analysts expect the US central bank to increase asset purchases or change them by selling short-term bonds to buy long-term debt.

At the September meeting of the Fed Monetary Policy Committee (FOMC), four FOMC members indicated that they expected interest rates to rise by 2023. These forecasts were made before several pharmaceutical laboratories confirmed the effectiveness of their Covid-19 vaccines. After the vaccine announcements, other FOMC members may advance their forecasts for the first rate hike at the December 15-16 meeting, according to Goldman Sachs. “That said, a largely restrictive message from the central bank seems premature at this stage,” the bank added

PETROLEUM

Oil futures rose Monday morning after the FDA approved the Pfizer Covid-19 vaccine.

However, the strong recovery in crude prices in recent weeks may be fuelled by excessive optimism and may not be able to withstand mixed news about vaccines or the global economy, warns Stephen Innes, head of global market strategy at Axi. Even so, “the future of oil markets looks much brighter than it was just a month ago,” Stephen Innes points out

At 7:30am, the February contract for North Sea Brent rose 51 cents to $50.48 per barrel, while the January contract for sweet light crude (WTI) listed on Nymex rose by 45 cents to $47.02 per barrel.