The oil price has dipped today, as traders digest President Trumpâ€™s threat not to sign the long-awaited US stimulus bill, and monitor the latest Covid-19 developments.
Brent crude is down 1% at $49.55, away from the nine-month highs seen last week, while US crude has dipped a similar amount to $46.50.
Stephen Innes, chief global market strategist at AXI, says Trumpâ€™s move â€œcertainly didnâ€™t help mattersâ€, but remains hopeful that the aid package will be approved.
No one will walk away from a stimulus deal; it is all about what contours get changed. And frankly, I do not think Main Street will mind getting a $2000 surprise stocking stuffer, and neither will the markets.
Ravindra Rao, vice president of commodities at Kotak Securities, says the travel disruption in the UK is also a factor:
â€œThis is the holiday period, when people go out and that prompts fuel demand. But now, a majority of flights have been cancelled to and from the UK, so this is going to impact oil demand (overall),â€
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Itâ€™s the last full trading day before Christmas, and the City is focused on some familiar themes – Brexit, the US stimulus package, and the deadlock at Britainâ€™s ports.
Last night, Donald Trump threw a late curveball into the mix – threatening not to sign the $892bn bipartisan stimulus bill approved by the Republican-controlled Senate and the Democrat-held House, unless it includes larger payments to help Americans through the economic crisis.
In an unexpected development, the US president laid into the proposal, demanding that Congress to â€œsend me a suitable bill or else the next administration will have to deliver a Covid relief packageâ€.
Trump call the bill a â€œdisgraceâ€ (even though Treasury secretary Steven Mnuchin has helped negotiate it, and has welcomed it). He insists that the $600 cheques being provided to most Americans should be bumped up to $2,000, or $4,000 for a couple, saying:
â€œThe $900 billion package provides hardworking taxpayers with only $600 each in relief payments and not enough money is given to small businesses.â€
â€œCongress found plenty of money for foreign countries, lobbyists and special interests, while sending the bare minimum to the American people who needed it wasnâ€™t their fault.â€
The idea was promptly welcomed by House Speaker Nancy Pelosi, who sounds keen to pep up the package as Trump demands.
Larger stimulus checks would probably be welcomed by the markets, as well as hard-pressed families.
But Trumpâ€™s late move has surprised investors (those who havenâ€™t clocked off for a festive break, anyway). Kyle Rodda of IG explains:
The developments stoked concern in the market that after months of bartering and dysfunction in Congress in getting a much needed package together, it may fall down at the final hurdle.
The UK and EU are continuing to push for a Brexit trade deal before Christmas, with Commission president Ursula von der Leyen taking personal control of negotiations last night.
Fisheries remain the sticking point, with the two sides now at odds over tens of millions of fish – a tiny fraction of the cost of no deal.
As our Brussels bureau chief Daniel Boffey explains:
The EU has said it is willing to lose 25% by value of the fish its fleets catch in UK waters. The UK has proposed the repatriation of 35% â€“ a potential difference of â‚¬63.8m (Â£58.1m).
However, Barnier said the British offer did not include pelagic fish such as anchovies, tuna and mackerel, meaning the loss of annual income would be closer to â‚¬230m a year.
Rail, air and sea services between the UK and France are resuming this morning after the French government agreed to ease its travel ban over fears about the new strain of Covid-19.
A mass Covid-19 testing programme for lorry drivers is to get under way to relieve congestion at British ports following an agreement to reopen the border between France and the UK.
Passengers from the UK disembarked from ferries in the port of Calais early this morning, but the huge backlog of thousands of lorries and vans will take days to clear. This leaves food transport firms facing heavy disruption over the crucial Christmas period, just as the Brexit transition end looms.
Thereâ€™s also a flurry of US economic data this morning as we clear the decks for Christmas, including the latest weekly jobless data (which hit a three month high last week).
- 1.30pm GMT: US durable goods orders for November
- 1.30pm GMT: US weekly jobless claims
- 3pm GMT: Michigan consumer sentiment index
- 3pm GMT: US home sales data for November