The stock market is growing and expects a new stimulus from the US government

Asian stock indices got a bullish driver after the American ones. The US Congress is gradually moving closer to an agreement on a package of measures to stimulate the economy. The credit market is calm. Treasury bond yields remained almost unchanged. The same dynamic is observed in the foreign exchange market. The exception is the British sterling, where growth was provoked against the backdrop of positive promises from Michel Barnier.

Investors are observing modest gains in stock indices, but on a large scale. Despite trade tensions between China and Australia, it was the Australian market that took the lead. The market is becoming more and more confident that the House of Legislature will make a positive decision on the direct infusion of funds into the US economy. But we are not talking about an amount of over $900 billion, but only about $748 billion.

The Fed will announce the results of its two-day meeting tonight. The rate is expected to remain unchanged. Changes can be affected by the bond purchases and on the basis of expanding the range of redeemable yields. But the most important factor in the movement of markets will be economic forecasts. Investors will closely monitor the regulator's expectations for changes in inflation and GDP.

Treasuries are stable at 0.900%. The dollar index resumed its decline and reached 90.18 – the new minimum for the year.

Market indicators

Major stock indices are trading in different directions, but mostly in the negative zone:

S&P 500 (F) 3.696.38 +9.38 +0.25%

Dow Jones 30.199.31 +337.76 +1.13%

DAX 13.547.55 +184.68 +1.38%

FTSE 100 6.574.65 +61.33 +0.94%

The news feed for 2020.12.16:
  • – UK Consumer Price Index (YoY) (Nov) at 10:00 (GMT+2);
  • – German Manufacturing PMI (Dec) at 11:30 (GMT+2);
  • – UK Service Sector PMI at 12:30 (GMT+2);
  • – Retail Sales (m/m) in the USA at 16:30 (GMT+2);
  • – Core CPI in Canada (m/m) (Nov) at 16:30 (GMT+2);
  • – US crude oil reserves at 18:30 (GMT+2);
  • – Results of the FRS meeting at 21:00 (GMT+2).

by Justforex, 2020.12.15

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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