Dual talks’ deadlock weighs on markets ahead of expected ECB stimulus, FDA vaccine seal

Markets are licking their wounds after a down day on Wednesday. Sentiment was pushed lower by the lack of a breakthrough in Brexit, which has a new Sunday deadline, and US fiscal stimulus talks, which remain stuck. The ECB is set to add stimulus and US data is of interest.

Brexit: UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen failed to reach a breakthrough after a long dinner in Brussels. The EU and the UK agreed to extend talks until Sunday and said they are far apart. GBP/USD is trading in the lower edge of the range. The bloc’s leaders meet on Thursday to take stock of negotiations and other topics.

US fiscal stimulus: Democrats and Republicans are still at odds over aid to states and liability clauses. The House passed a week-long stopgap bill, for now. In the meantime, the number of daily COVID-19 US deaths surpassed 3,000 for the first time. Hospitals are under growing pressure, with yet another record above 106,000 on Wednesday.

Stocks dropped also in response to a lawsuit brought against Facebook, accusing it of monopoly powers. Tech stocks dragged the mood lower. Outgoing President Donald Trump is making a last-ditch effort to overturn the election results with a lawsuit which is at the doors of the Supreme Court. The Electoral College convenes on Monday and is set to formalize President-elect Joe Biden’s victory.

The European Central Bank is projected to add around €500 billion to its Pandemic Emergency Purchase Program (PEPP). The additional stimulus is mostly priced in by markets. ECB President Christine Lagarde could comment on the euro’s rising exchange rate, which depresses inflation and exports. Any hints of cutting the depost rate, which is at -0.50% would send the euro down.

Vaccine: The US Food and Drugs Administration is set to approve the Pfizer/BioNTech coronavirus immunization on Thursday, following Canada’s greenlight on Wednesday and Britain’s approval last week. The FDA is considered the global Gold Standard.

US weekly jobless claims are set to remain above 700,000 after dropping last week after Wednesday’s JOLTs job openings surprised to the upside in October. Consumer Price Index figures for November are forecast to show an uptick in inflation, one week ahead of the Federal Reserve’s decision.

See US Initial Jobless Claims: Less indicative than emotional

Gold is consolidating its losses around $1,840 as traders assess the diminishing chances of US stimulus. Oil has failed to advance amid reports that production cuts’ compliance has been weak among OPEC members.

Cryptocurrencies have stabilized in lower ground, with Bitcoin changing hands at around $18,300.

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