U.S./China Partial Deal Keeps Markets Supported

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1. U.S./China Partial Deal Keeps Markets Supported

European bourses edged higher on Monday morning after the U.S. and China agreed a ‘phase one’ trade deal, offering some optimism for risk assets. Trump administration officials predicted big gains for the economy from a newly announced trade deal with China. Meanwhile, China has also confirmed purchasing a certain amount of U.S. agricultural products. 


2. German Economy Stagnates

Another badge of disappointing Manufacturing data this morning has revealed that the German economy is more or less stagnating. Germany’s economy ministry said on Monday that there are initial signs that an industrial recession could be coming to an end as orders stabilize but private consumption remains subdued even though disposable incomes continued to rise.


3. Boris Takes Charge – Again

Back in Europe, the U.K. Conservative Party’s resounding victory in last week’s general election made one thing clear: Britain will leave the European Union next month. Boris Johnson is already busy reshaping his team after having won the election. The only question now is whether Boris will manage to find middle ground with Scotland’s leader Nicola Sturgeon in the Brexit question. 


4. Madrid Climate Change Falls Flat

Following the Climate Change Summit in Madrid, participating countries have somewhat managed to agree to a contract which was not quite a step back but not a big step forward either. Most of the participating countries seem to value their own economic development more than a potential deal. Meanwhile, Greta Thunberg has threatened to put “leaders against the wall” should they fall short on their commitment to fight against climate change


5. Forex Preview: GBP Remains Supported

The GBP climbed back towards Friday’s peak on Monday, trading near $1.3340, as Boris Johnson’s victory has finally provided some much-needed clarity on the Brexit debacle. Forex markets had a muted response to the U.S.-China trade deal prospect, as lack of any details frustrated forex traders, who remain reluctant to make big bets as Christmas draws near.


6. Oil Prices Slide

Oil prices dipped this morning sliding off near three-month highs hit last week as investors are now looking for more clarity with regards to the China/US trade deal. A final settlement on the so-called Phase 1 deal could help defuse tensions after a long-festering trade war while also give investors more clarity with regards to the details of this mysterious preliminary deal. An official Phase 1 final deal has the potential to push global bourses and energy markets significantly higher. 



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CNBC Dec 16, 2019 2:48 AM ET
Investing Dec 16, 2019 7:33 AM ET
Bloomberg Dec 16, 2019 6:45 AM ET
Reuters Dec 16, 2019 05:58 AM ET

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