Stocks Mark Time, Pound Retreats Awaiting Brexit Deal
Global stock markets marked time while the pound retreated Friday with the focus firmly on whether Britain and the European Union can finally agree a post-Brexit trade deal.
"This week ends just like last week with the market focused on an apparent Sunday deadline to approve a Brexit deal," remarked AJ Bell investment director Russ Mould.
Sterling has fallen "as government ministers and (British Prime Minister) Boris Johnson himself have appeared to pour cold water on the prospects of a deal," said Mould.
"Overall though investors are seeing this as bluster intended to enable the UK side to claim victory in the negotiations assuming an agreement is eventually brokered," he added.
"Despite the near-term risks and uncertainties related to the pandemic and Brexit, the medium-term outlook for the UK remains favorable," said Kallum Pickering, senior economist at Berenberg.
- Final countdown -
"With luck, the UK and the EU will strike a deal shortly that will minimize the disruptions to the UK from leaving the EU Single Market and Customs Union on 31 December. Fading virus risks over the course of 2021 and a successful UK-EU deal should support confidence, spending and investment," Pickering added.
British and EU negotiators on Friday plunged into the "final hours" of their scramble for a deal, deeply divided on the highly-charged issue of fishing rights.
The UK will leave the EU single market in less than two weeks and time has all but run out for an agreement to be approved that heads off a severe economic shock.
The pound, which has hit 19-month highs against the dollar this week on trade deal optimism, retreated Friday.
Meanwhile, German business confidence unexpectedly rose in December, a key survey showed, even as the country ends the year back under a new lockdown to curb a second coronavirus wave.
Asian stock markets mostly closed lower earlier in the day.
The Bank of Japan on Friday extended an emergency virus-related lending program but kept its monetary easing policy unchanged, as the country faces a record spike in new Covid-19 cases.
Long-term economic hope has meanwhile overshadowed data showing an unexpected jump in U.S. jobless numbers, which followed a report earlier in the week that revealed a drop in retail sales.
On Capitol Hill, politicians remain locked in discussions for a rescue package they hope to get passed before the end of the year when crucial support measures for Americans run out.
- Key figures around 1455 GMT -
New York - Dow: FLAT at 30,292.76 points
London - FTSE 100: UP 0.1 percent at 6,555.00
Frankfurt - DAX 30: UP 0.3 percent at 13,713.50
Paris - CAC 40: DOWN 0.1 percent at 5,537.75
EURO STOXX 50: UP 0.1 percent at 3,562.05
Tokyo - Nikkei 225: DOWN 0.2 percent at 26,763.39 (close)
Hong Kong - Hang Seng: DOWN 0.7 percent at 26,498.60 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,394.09 (close)
Pound/dollar: DOWN at $1.3492 from $1.3584 at 2230 GMT
Euro/pound: UP at 90.64 pence from 90.28 pence
Euro/dollar: DOWN at $1.2246 from $1.2265
Dollar/yen: UP at 103.30 yen from 103.10 yen
West Texas Intermediate: UP 0.8 percent at $48.75 per barrel
Brent North Sea crude: UP 0.5 percent at $51.79 per barrel
Source: Agence France Presse
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