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Brexit, lockdowns dampen sentiment

Brexit, lockdowns dampen sentiment

Extended Brexit negotiations and the increasing chance of further US lockdowns as Covid infections continue to rise saw investors moving away from growth and towards havens in overnight trading. However late breaking news that the US Treasury has proposed a stimulus deal may lift sentiment in Asia Pacific trading.

Bonds, the US dollar and gold all rose modestly overnight after a sell down in European shares. Markets were rattled by news that the British Prime Minister is heading to Brussels in an attempt to break the stalemate. The German DAX and the UK FSTE 100 finished flat, but other markets fell as a solution appeared to move further away.

Rising infection rates saw various regions in the US preparing to lockdowns citizens again. US tech shares rose as investors re-focused on lockdown winners, but the gains for the Dow and S&P 500 were tepid. Oil prices slid after API data showed a surprise build in stores.

After the US markets closed the US Secretary of Treasury, Steve Mnuchin, made a statement that he had proposed a $916 billion stimulus package to the Democrats leader, Nancy Pelosi. Futures rallied. The proposal is almost the same value as the Democrats suggested package, but it is unclear if the composition varies. A viable bi-partisan stimulus bill could see Asia Pacific trading turn positive.

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