Daily Market Commentary 10th December

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Markets turned sour overnight, as British PM Johnston heads to Europe for last ditch efforts to sign a trade agreement, before Brexit becomes a reality. These is still huge division between the two parties and markets are hopeful there is a deal hammered out, before this weekends European Commission Summit? The EUR plunged to 1.2050, ahead of the ECB meeting tonight, which is expected to add further QE to stimulate the EU, mired in various stages of lock downs, arising from the surging second wave. The GBP rallied to 1.3360, anticipating a deal of some sort with the EC, which will determine the direction of the currency.

The US $900+ bailout bill from Congress has stalled again, as the economy plunges into a new series of economic lock-downs, in the face of the surging virus cases in a second wave. It appears political partisanship remains high and the lack of action, is hurting many desperate victims. The negative sentiment enveloping markets has seen a resurgent US Dollar. The NZD crashed back to 0.7020, while the AUD tempered its earlier gains, drifting to 0.7430.

The virus and the economic devastation caused by lockdowns are impacting markets, while political relief seems elusive, despite the vaccine roll-out. The EU and UK are focused on the Post-Brexit trade talks, ahead of the all important EC Summit, this coming weekend. Expect further market volatility.

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