U.S. Futures Rise; Pound Gains on Brexit Deal Hope: Markets Wrap

(Bloomberg) -- U.S. futures climbed with European stocks and the pound jumped as investors awaited the unveiling of a post-Brexit trade accord after both sides earlier agreed on an outline of the deal.

The Stoxx 600 Index edged higher ahead of an expected press conference from Prime Minister Boris Johnson on Thursday, which was delayed over last-minute haggling. Negotiators worked through the night putting the finishing touches on the historic pact, which will formally complete Britain’s separation from the European Union. The pound rose to the highest in a week, while the euro was steady.

Contracts on the S&P 500 Index nudged higher and most Asian stocks gained. Alibaba Group Holding Ltd. sank more than 8% in Hong Kong after China kicked off an investigation into alleged monopolistic practices at the tech giant. Volumes were subdued in many countries on Thursday. All derivatives trading is shut on Eurex and most equity markets will be closed Friday for Christmas Day.

The imminent announcement of a Brexit deal is providing yet another boost to markets as traders head into year-end. In the U.S., the Nasdaq and Russell 2000 indexes reached intraday highs on Wednesday, with countries ramping up vaccination programs and investors seemingly confident a U.S. stimulus package will eventually get done despite President Donald Trump’s objections.

“Right now we have a lot of animal spirits surging into year end,” Michael Purves, founder and CEO at Tallbacken Capital Advisors, said on Bloomberg TV. “As constructive as I am on markets in the broader term, I do expect there will be a hangover of sorts to process this over-extension some time later this winter.”

That comes as a new study showed the mutated coronavirus strain appears to be more contagious and will likely lead to higher levels of hospitalizations and deaths next year. In the U.K., Prime Minister Johnson imposed tougher restrictions across a swath of England as authorities try to rein in the virus variant that’s spreading quickly.

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index rose 0.2% as of 7:12 a.m. New York time.
• The Stoxx Europe 600 Index increased 0.2%.
• The MSCI Asia Pacific Index rose 0.5%.
• The MSCI Emerging Market Index gained 0.4%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%.
• The euro was little changed at $1.2192.
• The British pound jumped 0.7% to $1.3592.
• The onshore yuan strengthened 0.2% to 6.528 per dollar.
• The Japanese yen weakened 0.1% to 103.66 per dollar.

Bonds

• The yield on 10-year Treasuries declined one basis point to 0.94%.
• The yield on two-year Treasuries was unchanged at 0.12%.

Commodities

• West Texas Intermediate crude declined 0.7% to $47.76 a barrel.
• Brent crude dipped 0.7% to $50.84 a barrel.
• Gold strengthened 0.1% to $1,874.53 an ounce.

©2020 Bloomberg L.P.