Daily Briefing: Delivering hope

By Danilo Masoni

The extension of last-ditch talks over a post-Brexit trade deal beyond the Sunday deadline and the big logistical efforts to deliver first vaccine shots to Americans later today is perhaps the right set of newsflow to start the week with.

That’s helping European and U.S. stock index futures move higher along with strong oil prices, underscoring the return of risk appetite.

Reflecting the renewed Brexit hopes is sterling, firmly set for its best day in around a month as the odds of a deal scenario rise on betting markets and investors’ immediate focus turns to Barnier’s briefing to EU ambassadors later on.

China equities also started the week on a solid footing on hopes of more fiscal policy support, while talks in the U.S. over a coronavirus aid package look set to continue just ahead of the Fed’s last policy meeting of the year later this week. Central bank meetings in the UK and Japan are also due.

Adding to the cheer is relentless M&A activity as corporates put at work their big piles of cash and cheap funding potential.

AstraZeneca has agreed to buy U.S. drugmaker Alexion (NASDAQ:ALXN) for $39 billion in its largest ever deal, while on a smaller scale private equity firm Vista Equity agreed to buy software firm Pluralsight in a $3.5 billion cash deal.

Suggesting some caution though are moves by government to impose more restrictions to stop the spread of Covid-19 infections. Germany will close most of the stores until at least Jan. 10, cutting short the busy Christmas shopping season.

Key developments that could provide more direction to markets on Monday:

– UK Rightmove house prices

– Kazakhstan central bank meeting