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% 
SMI 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 closing in New York 
 
EUR/USD 1.2140 +0.23% 
EUR/JPY 126.29 +0.25% 
USD/JPY 104.04 +0.02% 
 

TO FOLLOW IN FRANCE

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

actions

European equity markets are expected to 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 7:40 a.m., the CAC 40 futures contract gained 31 points, or 0.6%, according to data from broker IG Markets. The CONTRACT on the DAX 30 was up 70 points, or 0.5%, and the contract on the FTSE 100 was up 5 points, or 0.07%.

The rollout of the vaccine from laboratories Pfizer and BioNTech in the United States, which received emergency use authorization from the US health authority, the Food and Drug Administration (FDA), over the weekend, is set to begin on Monday, adding fuel to the mill for optimistic investors and overshadowing the lack of progress in negotiations on a recovery plan and the rise in Covid-19 cases in the country.

Britain's FTSE 100 index is likely to face some resistance on Monday, due to the appreciation of the pound sterling 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 agreement.

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

Sunday was the deadline set by British and European leaders by which an agreement had to be reached, under penalty of a "hard" Brexit on December 31.

Investors also continue to monitor negotiations in the United States between Democrats and Republicans on new measures to help businesses, households and local communities cope with the economic repercussions of the epidemic. Lawmakers, like the White House, are in favor of a plan of around $908 billion, but disagreements remain on key issues such as the scope of aid to local authorities and the legal protection of businesses.

On Friday night, Wall Street closed in a contrasting fashion. Supported by the strong rise of the stock Disney, the Dow Jones Index (DJIA) managed to grab nearly 0.2%, to 30,046.37 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. For the week as a whole, the Dow lost 0.6%, the S&P 500 lost 1% and the Nasdaq 0.7%.

In Asia, markets are moving in scattered order on Monday. In Tokyo, the Nikkei index closed up 0.3% and the flagship index of major Chinese stocks, the Shanghai Composite, gained 0.5% at the end of the session. In contrast, the Hong Kong Stock Exchange's Hang Seng gave up 0.6%.

Obligations

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

The yield on the ten-year Treasury bill fell 1.5 basis points to 0.892%. For the week as a whole, the market's benchmark stock lost 7.5 basis points, its biggest weekly decline since June, according to data from Dow Jones Market Data.

FOREIGN EXCHANGE

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

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

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

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

At the September meeting of the Fed's Monetary Policy Committee (FOMC), four FOMC members said they expect interest rates to rise by 2023. These predictions were made before several pharmaceutical companies confirmed the effectiveness of their vaccines against Covid-19. After the vaccine announcements, other FOMC members may advance their forecasts for the first rate hike at the Dec. 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.

Oil

Oil futures are rising Monday morning after the FDA approved the Pfizer against Covid-19.

The strong recovery in crude oil prices in recent weeks, however, could be fueled by too much optimism and may not hold up in the event of mixed news on vaccines or the global economy, warns Stephen Innes, head of strategy for global markets at Axi. Even so, "the future of the oil markets looks much brighter than it was just a month ago," Innes said.

At 7:30 a.m., the February contract for North Sea Brent gained 51 cents to $50.48 a barrel, while the January contract for Nymex-listed light sweet crude (WTI) was up 45 cents to $47.02 a barrel.