Stimulus & Brexit News Lift Markets

Global equities benchmarks have started the week in a positive tone as traders react to a swathe of positive developments over recent days. Confirmation that president Trump has approved the $900 billion COVID relief package has helped lift risk sentiment in US assets. With the relief deal, US citizens and businesses will now receive a second tranche of support while the government itself will avoid going into shutdown. Following Trump's approval and insistence that stimulus checks for American citizens be increased from $600 to $2000, the House subsequently voted in favour of the proposal. This latest development has sent equities markets firmly higher.

In the UK and Europe, trade terms have finally been secured for when Britain exits the EU on December 31st. However, there has been a mixed reaction on both sides. While a hard economic cliff edge has been avoided, some sectors are concerned with the specifics of the deal secured and uncertainty around logistical elements is creating some trepidation among investors though.

The COVID backdrop has provided a rather mixed market impact also. While news that the EU has now begun vaccinating citizens has added to the growing optimism, this has been tempered by the ongoing rise in global cases. Globally, infections and deaths are soaring and fears over the new strain of the virus pose immediate risks. However, global governments remain confident that they can bring the virus under control over the coming months.

Technical Views

DAX

The DAX gapped higher at the start of the week with European assets seemingly benefiting more than UK assets in the wake of the deal. Price moved above the 13322.69 level and, despite bearish divergence in momentum studies, the near term outlook remains bullish for now.

S&P500

The S&P is attempting to break out to fresh all time highs here with price currently challenging the 3714.50 level. While momentum studies are flagging bearish divergence here, suggesting risks of a reversal lower, the near term outlook remains bullish while price holds above the 3586 level.

FTSE

The FTSE is now once again breaking out above the 6518.2 level resistance. better risk backdrop broadly as well as relief over the Brexit deal are helping turn sentiment higher again for the FTSE with the 7025.8 level the next upside target for bulls.

Nikkei

The Nikkei has now broken out above 26949.5 resistance level following the latest rally off the 26213.4 level support. While price holds above here the near term bias remains bullish with the retest of the broken bullish trend line the next technical development to monitor.

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