Markets expect new stimulus and the resolution of the issue with Brexit this week.

This morning has started with the relatively positive Japanese GDP data. The third quarter accelerated growth to 5.3%, however, investors were prepared for the fact that high numbers always follow a strong failure. The market reaction is absolutely negligible.

Despite the seemingly rapid recovery of the world economy, now we can only talk about a rebound from the abyss, into which it fell in the middle of this year. Incentives are still needed, and central banks are ready to provide them. Yoshihide Suga has already announced a ¥73.6 trillion aid package. It is expected to be followed by the ECB with €500 billion and the Fed poised to add $900 billion.

In a sign of expectations of new liquidity, the market seems calm. Despite the continued rise of infections and shake-ups concerning Brexit. The VIX Index, reflecting the market concern, is calm and trading near the August lows at the level of 21.64.

Boris Johnson also reassured the markets a bit, promising to start negotiations in search of a compromise on Wednesday. Apparently, both sides have taken a tough stance and are ready to receive a favorable compromise from each other at the last moment. In this regard, the market estimates the probability of a deal being low. Options on a deal do not imply its conclusion. In this context, relative calmness can be considered with a negative bias.

Market indicators

While expectations continue, the market is slightly correcting.

S&P 500 (F) 3.679.38 -11.37 -0.31%

Dow Jones 30.069.79 -148.47 -0.49%

DAX 13.267.805 -3.20 -0.02%

USD Index 90.875 +0.086 +0.09%

Gold 1.869.20 +3.20 +0.17%

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by JustMarkets, 2020.12.08

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.