The FTSE 100 was set to rise today amid hopes that Brexit negotiators will eventually overcome French intransigence over the trade talks.
President Emmanuel Macron was accused by British negotiators last night of making new demands at the eleventh hour, according to the Financial Times, in what it described as a “major obstacle” to the talks.
The French president and a handful of other states including the Netherlands and Denmark have become increasingly concerned EU negotiator Michel Barnier is giving too much away to the UK.
But while the new pressure from France, in particular, have worried Prime Minister Boris Johnson and ended hopes of a deal this weekend, negotiators still expect one can be signed next week.
As hopes of deal steadily grew yesterday, the pound rose strongly and the FTSE 100 hit a nine-month high, albeit with a modest gain on the day.
The IG Index platform was calling a further rise this morning, with a 30 point gain to 6516.3. CMC Markets was pricing it up 28 points. Germany and France were expected to post modest falls, highlighting the London market’s reliance on Brexit deal news.
A late announcement yesterday from Pfizer cutting its planned vaccine delivery targets due to supply issues will weigh on sentiment in Europe as it did on Wall Street, although growing support in Washington for a near-$1 trillion Covid support package muted the impact somewhat.
Asian markets had an uneventful session this morning.
Trading in London was expected to be fairly uneventful ahead of US non-farm payrolls at 1.30pm set to show a fall in the number of new jobs being created by the world’s biggest economy.
Expectations are for a 469,000 new jobs figure for last month, down on October’s 638,000 as the pandemic worsened US employment prospects.
In the UK, we get the construction PMI survey results at 9am. Activity for November is expected to be 52, down from 53.1 in October on an index in which anything above 50 marks growth.
AJ Bell, the investment firm, could see its shares fall back to profit taking after its strong gains yesterday driven by a powerful performance through the volatile Covid months.
Stockbroker Jefferies issued a note to clients overnight declaring that while the 2020 profits were ahead of forecasts, that was mostly due to the exceptional number of transactions during the pandemic as investors reacted to extraordinary events. That was not likely to be repeated next year, it warned.
Shares in Cineworld could come under new pressure after Warner Bros declared it would be simultaneously launching its new films online and in cinemas next year, hobbling movie theatres’ efforts to get back on their feet.
Studios have already crippled cinemas this year by delaying releases repeatedly. Last night, US theatre chains AMC Entertainment and Cinemark both fell heavily and Cineworld is likely to follow suit.
Movie cinemas have lost the upper hand against studios during the pandemic, agreeing to shorten the “window” for showing films exclusively in cinemas.
Warner Brothers said it would simultaneously stream Wonder Woman later this month on its cinema release date but has said such moves are only temporary.
The oil price will be in focus again today. Brent crude was back on the march this morning with a near-2% gain to $49.64 adding to potential interest for FTSE heavyweights BP and Shell.
That could serve as a distraction in the industry to news that oil trader Vitol, with big operations in London, paid more than $160 million last night as it admitted bribery in three countries and was accused of trying to manipulate oil benchmarks.
Vitol paid bribes in Brazil, Ecuador and Mexico over 15 years to win contracts, it admitted in a settlement with the US Department of Justice. It also settled civil charges from the US Commodity Futures Trading Commission alleging it tried to manipulate two oil price benchmarks in 2014 and 2015. Vitol did not admit nor deny the latter claims.