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FTSE 100 set to open in green as UK seals Brexit trade deal with EU
UK stock markets are set to open on a positive footing on Tuesday, 29 December, following the optimism over the Downing Street administration successfully securing a free trade arrangement with the European Union. The months-long deliberations between the United Kingdom and the European Union have concluded in a fruitful outcome for the Britons.
Brexit trade deal to bolster markets
After the completion of Brexit deadline of 31 December, there will be no tariffs on the cross-border trades between the United Kingdom and the partner countries of the European Union. The highly-awaited result on the sensitive issue of international trade has the full potential to lift the markets as investors were keenly eyeing a prospective agreement between the EU and the UK. Furthermore, there will not be an upper ceiling on the amount of goods that can be traded between the UK and the nations under the umbrella of the EU.
Indicating a positive start in the London equities on Tuesday, the FTSE 100 futures were trading 72 points or 1.11 per cent higher at 6,529.5 at around 0643 GMT.
FTSE 100 (1-month)
(Source: EODHD/Others, Thomson Reuters)
The recently-settled arrangement for free trade is likely to get a go-ahead from the UK Parliament on 30 December. The markets only have two-and-half days to realise the recovery in 2020 as the holiday-trimmed week will witness full-day trading on 29 and 30 December followed by a half-day session on 31 December.
Trump signs higher relief package
Meanwhile, the President of the United States, Donald Trump has signed the highly-delayed yet-anticipated Covid-19 relief package to safeguard the interest of people across the US. The House of Representatives has voted to increase the quantum of relief payments to $2,000 from the earlier amount of $600 and, also, countermand Trump's veto of the annual defence authorisation bill.
Year-ender cheer to FTSE 100
Following the series of development around the last weekend, and then Trump signing the Covid-19 relief package led to an upbeat momentum for the US stock markets as well with the key stock indices Dow Industrials, Nasdaq Composite and the S&P 500 surging to fresh record highs on Monday. The cumulative push from the cheer around the Brexit trade deal and the jubilation at the Wall Street can help the headline FTSE 100 index to close the trouble-laden 2020 with minimal year-to-date (YTD), if not with gains.
GBP likely to add strength
The GBP to USD pair ended at 1.3548 on Saturday, 26 December, reacting to the progress of the Brexit trade arrangement. The Bank of England has fixed the currency conversion rate of USD 1.3522 and EUR 1.1095 against a unit of pound sterling on 23 December.
GBP vs USD (1-month)
(Source: EODHD/Others, Thomson Reuters)
An ounce of gold last closed at $1,875.82, while Brent crude oil and NYMEX crude oil were trading at $51.29 and $48.30, respectively, a barrel. The cryptocurrency market retreated slightly on Tuesday with the bitcoin slipping more than $2,000 from the lifetime high of 28,395.62. On a 24-hour scale, bitcoin was trading nearly 3 per cent lower at around $26,276.66.
