European Market Comment Dec 24

• European markets are set to open higher this morning, driven by anticipation that a Brexit deal will be agreed this morning.
• Stock markets in the UK and France are open for a half-day due to Christmas, while the DAX is closed.
• The Brexit news sent the pound higher against both the euro and the dollar.
• In commodities, oil prices climbed higher on the back of US inventory data.

FTSE 100 heads higher on Brexit hopes

The FTSE 100 is set to open 0.2% higher this morning at 6531.0 from 6518.7 at the end of play yesterday.

UK markets are open for a half-day and will close at 1230 GMT, when they will shut for the holiday season before re-opening on Tuesday 29 December.

European indices follow

The Euro STOXX Index is called to open 0.1% higher at 3546.9 from 3542.6 at the close on Wednesday.

France’s CAC 40 is set to open 0.3% higher at 5552.5 from 5533.8. The index is open for a half-day today and will close at 1405 GMT and will reopen on Monday 28 December.

The DAX is closed for trading today and re-opens on Monday 28 December.

Start trading the opportunities with indices today.

UK and EU expected to strike Brexit deal

Brexit talks continued overnight, and the UK and EU are thought to be on the cusp of agreeing a long-awaited deal.

A spokesman for the European Commission, Eric Mamer, said ‘it will hopefully be an early start tomorrow’, while UK prime minister is reported to have held talks with cabinet ministers to prepare them for a possible deal being announced within the next few hours.

The timing is significant considering there is just one week before December 31. Any deal would need to be pushed through the UK parliament before then, whilst the EU is expected to provisionally accept any agreement before the deadline and then formally approve it next year.

The FT reports that the Brexit deal is largely agreed and that both sides are fine tuning the details. It said the deal will preserve tariff-free trade and cover other important issues like security and cross-border energy provision. The services sector – which is particularly important to the UK – is not expected to be covered by it.

The news will certainly buoy markets this morning, but the devil will be in the detail to figure out exactly what the UK and the EU have agreed to.

Forex: Pound surges on Brexit hopes

Hopes of a Brexit deal in time for Christmas sent the pound higher this morning, and the gradual re-opening of the UK-France border is also providing support.

GBP/USD traded 0.4% higher at 1.35504 after ending yesterday at 1.34953.

Meanwhile, EUR/GBP traded down 0.2% at 0.90078 from 0.90303 at the close on Wednesday.

EUR/USD was up 0.1% this morning at 1.22051 from 1.21870.

Start trading the opportunities in the forex market today.

Commodities: Oil prices rise on US draw

Oil prices found support after data showed US inventories of crude oil and gasoline both declined in the week to December 18. Crude stockpiles fell by 562,000 barrels, according to the Energy Information Administration, while gasoline inventories fell by 1.1 million barrels.

Brent traded at $51.41 this morning, edging higher after ending yesterday at $51.16, while WTI followed to $48.31 from $48.07.

Start trading the volatility in oil prices today.

Gold traded slightly higher at $1876 from $1873 at the close on Wednesday.

Start trading gold and other precious metals today.  

Market-moving events in the economic calendar

The economic calendar is light today ahead of the holiday break. The main event doesn’t come until later tonight, when Japan releases CPI, unemployment and retail trade data from 2330 GMT.

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.