Connect with us

Hi, what are you looking for?


Stimulus Breakthrough, Brexit Limbo & Holiday Mood

By Lukman Otunuga, Senior Research Analyst at FXTM,

After months of failed negotiations, Congressional leaders have finally reached a deal on a $900 billion economic relief package to boost the US economy.

Although this agreement is less than half of the $2 trillion deal that Pelosi and the Trump administration were close to securing before the November election, ‘half a loaf is better than no bread’ as they say. The stimulus breakthrough failed to lift risk sentiment this morning as Asian shares dipped amid unease over a new virus strain in the United Kingdom. With the lack of progress on Brexit talks also likely to blunt appetite for risk, European markets are set to open on a soft note. Market volatility may cool over the next few days, especially if investors head for the sidelines ahead of the Christmas holiday break on Friday.

Brexit countdown: Transition deadline looms

Negotiations between the United Kingdom and European Union will resume today after both sides missed yet another deadline to reach a post-Brexit trade deal.

Given how the European Parliament had already warned that it would not be able to ratify any deal in 2020 unless it had been presented with one by Sunday, where do we go from here? With ten days left until the transition period ends, time is running out for a Brexit trade deal. It is becoming clear that EU fishing access to UK waters after Brexit remains the major obstacle obstructing any progress in talks. We are now very used to the constant back and forth around Brexit negotiations which we have seen over the past few years, but the week ahead could be tense for Sterling as the hard deadline of 31 December looms.

Looking at the technical picture, the Pound has woken up on the wrong side of the bed this morning thanks to rising fears around a no-deal Brexit. It has weakened over 1.5% against the Dollar, approaching the 1.3300 level as of writing. A breakdown below this support may open a path back towards 1.3200.

Commodity spotlight – Gold

The bipartisan breakthrough in US stimulus talks has injected Gold bulls with enough confidence to challenge the $1900 level.  Buying sentiment towards the metal is likely to remain supported by coronavirus-related concerns and a weaker US Dollar. Gold has appreciated almost 7% this month and could extend gains if bulls are able to maintain control above $1900. But this level could prove to be reliable resistance, which means a decline back towards $1850 would be on the cards.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


You May Also Like


An Ikeja Magistrates’ Court in Lagos on Monday, December 4, remanded Reuben Temitope, 30, for allegedly abducting and defiling a 13-year-old girl. Mrs. E....


Instagram has announced new and improved editing tools to help creators and users better express their creativity on the app. The new tools include...


A 12-year-old, Nkanu Daniel Victor has emerged the winner of the 2023 edition of the MTN mPulse Spelling Bee Competition, after months of intense...


AT&T has awarded a five-year contract to Ericsson, involving an investment of nearly $14bn to expedite the commercial scale deployment of an open radio...