Great Britain and the European Union are ready to sign an agreement. Optimism has grown in the market, the dollar is weakening

December 24, 2020

The stock market started to grow as far as there are already no concerns about the UK-EU deal. Boris Johnson agreed to the conditions that were introduced by the European Union. The share of the catch of the European block in the waters of the UK should be reduced by 25% in five and a half years. The compromise was reached within the reduction. Earlier, the European Union insisted on 10 years.

Just before the holidays, this is very positive news which probably saved the markets from “pressing the Sell button” before leaving for the weekend. Stock indices went up. The yield on 10-year bonds rose across the entire spectrum of the market. The leaders of growth were the British Gilts, which added more than 100 basis points and reached 0.314% immediately. The sterling followed the credit market with the biggest gains in a month.

Another positive point is the widening of the yield spread between the 2-year and 10-year US bonds. During the day, the difference increased by 25 basis points. And the difference between 5-year and 30-year bonds even reached a 4-year maximum. This reduces fears about the stability of the US economy in the long term.

Investors decided to ignore Trump’s criticism of the stimulus measures package, as sooner or later these stimuli will appear anyway. Also, the market (with the exception of the foreign exchange market) did not pay attention to the negative statistics in the US, where leading indicators indicate a slowdown in GDP in the 4th quarter.

Major stock indices are trading with the growth:

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S&P 500 (F) 3,687.62 +6.12 +0.17%

Dow Jones 30,129.83 +114.32 +0.38%

DAX 13,587.23 +169.12 +1.26%

FTSE 100 6,495.75 +42.59 +0.66%

Индекс USD 90.112 -0.228 -0.25%

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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Great Britain and the European Union are ready to sign an agreement. Optimism has grown in the market, the dollar is weakening