The British pound plunged on Monday after EU chief negotiator Michel Barnier told national envoys in Brussels that he was “rather downbeat as to the prospects of agreement” while Irish Prime Minister Micheal Martin said on Sunday the chances of a deal were just 50-50. On the other hand, the Sun newspaper reported that UK Prime Minister Boris Johnson is ready to pull out of Brexit talks in response to new EU demands. The negotiations are planned to continue on Monday, British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen are set to review the situation in the evening.
European markets retreated lower on Monday as investors remain concerned about the UK and European Union negotiating a post-Brexit trade agreement. US stock futures trading slightly lower as the number of COVID cases continues to surge in the US. On Sunday, 101,487 patients were in the hospital with the virus, the fifth consecutive day the US surpassed 100,000 hospitalizations.
Crude oil prices started on a bearish note. While during the last week oil prices ended higher following the compromise deal reached by the OPEC members and its allies.
In the currency market, the Asian currencies fell on Monday after Reuters reported the United States to impose sanctions on a dozen Chinese officials. The US dollar finally recovered from the previous week losses and trading above $91 during the European session.
Gold prices slipped on Monday. During this week, the gold investors and traders will closely monitor the FDA’s approval of the vaccine created by Pfizer and BioNTech which is scheduled to come on Thursday.
On the data front, China exports advanced 21.1% year-on-year in November, much bigger than the economists' forecast of 12%. Imports rose 4.5% year-on-year in November, slightly slower than 4.7% in October. The trade balance increased to $75.42 billion versus the expected $53.50 billion.
This week the main highlights of the economic calendar will be the ECB and BOC interest rate decision and statement, UK GDP and industrial production data, US CPI and Oil inventories. On the earnings front, Adobe, Chewy and Costco will release their last quarter financial results.
Worldwide, there have been at least 66,357,000 reported infections and 1,530,000 reported deaths caused by the new coronavirus so far. In the US, more than 14.7 million confirmed cases have been reported in the US since the pandemic began, and more than 282,310 people have died. On the positive side, Russia has started COVID-19 vaccination while the UK is set to become the first country to roll out the Pfizer/BioNTech COVID-19 vaccine this week.
EUR/USD: After two weeks of consecutive upside rally the currency pair started the week lower. At the time of writing, the pair trading below 1.2100.
The important levels to watch for today: Support- 1.2080 and 1.2040 Resistance- 1.2140 and 1.2180.
GOLD: The yellow metal dropped to near the short-term support area of $1820. Overall, the momentum remains bearish throughout today.
The important levels to watch for today: Support- 1820 and 1806 Resistance- 1836 and 1842.
Quote of the day: One of the many funny things about the stock market is that every time one person buys, another sells, and both think they are astute-William Feather.