European Stocks Higher; Brexit Deal Confidence Growing
European stock markets traded higher Wednesday, helped by signs of progress in Brexit talks and continued confidence in the Covid-19 vaccine rollout ahead of this week’s ECB policy meeting.
At 4:05 AM ET (0905 GMT), the DAX in Germany traded 1.1% higher, the CAC 40 in France rose 0.5%, while the U.K.'s FTSE index climbed 0.8%.
British Prime Minister Boris Johnson will meet Ursula von der Leyen, president of the EU's executive European Commission, in Brussels later Wednesday to try and solve the issues their negotiators have struggled with for months.
The differences over fishing rights, fair competition and ways to solve future disputes may still exist, but the decision of the U.K. government to drop controversial clauses in the U.K. Internal Market Bill, which would clash with the Brexit divorce agreement, may help with the discussions. The move would effectively leave much of the Northern Irish economy under EU regulations next year, breaking a promise made by Johnson to avoid any weakening of the U.K.'s integrity.
There is now a "smoother glidepath" towards a trade deal U.K. Cabinet Office minister Michael Gove told Sky News Wednesday, after the ditching of the clauses.
Adding to the positive tone is renewed confidence with Covid-19 vaccines.
The U.K. started vaccinating its public with the Pfizer/BioNTech injection on Tuesday, while the U.S. Food and Drug Administration found no new safety or efficacy concerns, suggesting prompt American authorisation.
Additionally, the rival Oxford/AstraZeneca Covid vaccine is safe and effective, researchers confirmed in The Lancet journal on Tuesday. There had been doubts expressed about this drug when its interim trial results were made public a couple of weeks ago as three efficacy levels were reported.
More monetary support looks likely this week, with the European Central Bank holding its latest policy-setting meeting on Thursday. The central bank is widely expected to increase and extend its pandemic bond-buying program.
In corporate news, Balfour Beatty (OTC:BAFYY) stock rose 2.3% after the construction company predicted a strong 2021, helped by the approval of the new high-speed rail line in the U.K.
Tesco (OTC:TSCDY) stock rose 1.9% after the U.K. supermarket giant announced it will complete the sale of its Thailand and Malaysia businesses later this month, in a deal worth 8 billion pounds.
Oil prices edged higher Wednesday, after Iraqi militants attacked a crude field in the country, reversing an earlier loss driven by a jump in U.S. fuel stockpiles.
The American Petroleum Institute stated late Tuesday that U.S. crude oil supplies rose by 1.14 million barrels for the week ending Dec. 4, rather than the 1.51-million-barrel draw expected. This puts the focus now on the supply data from the U.S. Energy Information Administration, due later Wednesday.
U.S. crude futures traded 1% higher at $46.04 a barrel, while the international benchmark Brent contract rose 1% to $49.34.
Elsewhere, gold futures fell 0.4% to $1,866.90/oz, while EUR/USD traded 0.2% higher at 1.2129.
Reference by: investing.com
Dec 9, 2020
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