Optimism continues to reign on stock markets. The US stimulus package and the Brexit agreement pushed the MSCI global stock indicator closer to record maxima.
The successful conclusion of negotiations, which began in 2013 on an investment agreement between the EU and China, will be a blow to the former so-called “America First” strategy. The deal will give European investors access to the Chinese market in a variety of industries, from automobiles to biotechnology. Against this background, the dollar continues to decline, and the American Treasuries confidently hold around 0.950%.
The only weak link in the credit market is the British Gilts. There is some kind of tension and fear here. Since the negotiations no longer affect the market, investors are starting to assess the current economic situation and the consequences of the actual withdrawal. Due to the fact that the British economy has suffered significantly from long-running negotiations, and the coronavirus pandemic has increased the pressure on the economy, the beginning of the year for Foggy Albion can turn out to be very difficult.
Industrialists in the automotive industry face great difficulties. Of course, the sector escaped disaster, but there is even more damage that can be done after last week’s deal. The costs related to the need to switch suppliers and the burden of customs declarations, certificates and audits can still keep investing in this industry at a very low level.
Against this backdrop, the sterling feels uncertain, and the FTSE accelerated its growth in anticipation of a decline of the British currency.
Major stock indices are trading with the rise. The dollar index didn’t receive any drivers to growth.
- S&P 500 (F) 3,745.62 +18.12 +0.49%
- Dow Jones 30,403.97 +204.10 +0.68%
- DAX 13,870.80 +80.51 +0.58%
- FTSE 100 6,664.55 +162.44 +2.50%
- USD Index 90.052 -0.223 -0.25%
