ZuluTrade Blog

Daily Market Outlook - Brexit and fiscal stimulus weigh down markets

Market View | Friday, December 11, 2020 1:28 PM GMT

EU markets are trading lower as Brexit talks continue to reach no resolution despite the deadline fast approaching. GER30 is currently recording the biggest losses by -1.09%, and FR40 is following the same negative momentum by 0.94% and UK -0.5% respectively. The US premarket opening reflects the same bearish bias as there is still no clarity around the extra fiscal stimulus package. 

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US news: Time Magazine has selected US President-elect Joe Biden and Vice President-elect Kamala Harris as joint Persons of the Year. Despite Donald Trump’s continuous attempts to action his unsubstantiated “elections-stolen” claims, Joe Biden is still expected to take office in January.  The FDA panel overwhelmingly backs Emergency Authorization (EUA) for the Pfizer and BioNTech COVID-19 vaccine in the US. 

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EU-UK news: ECB announced it has increased PEPP (Pandemic Emergency Purchase Programme) by €500bn to €1.85 trillion, with Francois Villeroy (ECB policymaker) stating "We will do less if the financing conditions remain favourable like today. If the opposite is needed, we will do more,". On the other hand, BoE believes UK banks are strong enough to tolerate potential losses which may arise as a result of Brexit and COVID-19.

In other major EU news,  EU leaders came to an agreement to cut gas emissions by a minimum of 55% until 2030. 

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Corporate news: Airbnb’s value surged by 115% in its market debut yesterday, taking its valuation above $100bn, and making the company more valuable than the seven largest US-traded hotel chains combined (i.e Hilton, Hyatt..). Jefferies downgraded Tesla from buy to hold as they believe the company is not capable to prevail in the auto-industry.

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Macros: Earlier today, Germany's inflation rate YoY fell at -0.3%  while Spain’s remained stable at -0.8%. German GDP dropped by 5.5% in 2020 according to Bundesbank. Later today, US Core PPI YoY is expected to increase by 0.2% while US Michigan Inflation Expectations remain unchanged at 2.8%.


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