Today marks a relatively quiet day to mark the beginning of a new week on the financial markets.
The day began with a series of Q4 Tankan reports from Japan. All numbers were in negative territory but were still better than anticipated, with the exception of the all industry capex. In addition, industrial production in October was also better than the forecasts.
The same goes for the industrial production in the eurozone. Recall that despite a second round of lockdowns in the European Union in November and December, this time around countries opted to leave large factories open, with only the services sector getting affected by the pandemic.
On the stock market, today investors are paying attention to AstraZeneca. The pharmaceutical company, recently in the news for developing a somewhat controversial Covid-19 vaccine, announced it will acquire Alexion, a US drug manufacturer that is known for making treatments for rare diseases. Though this will set back AstraZeneca’s finances in the immediate term, experts are lauding the deal as a great move to increase AstraZeneca’s hold on the market, and believe the company will profit from the acquisition in the long term.
Moreover, the $908 billion bipartisan stimulus bill is finally going to make its way into Congress today. The House of Representatives has already signalled its approval of the stimulus package. It will now be up to the Republican-dominated Senate to decide whether to unlock the funds that the US economy sorely needs.
Across the Atlantic, the Brexit drama continues. The European Union and the United Kingdom previously decided that they will have a firm decision on whether there will be a deal or not by yesterday. However, today it was announced that they will continue negotiating this week.
Investors have perceived the move positively because it is an indication that a deal may be close, after all. If the gap between the UK and the EU was too large, they could have called off the talks yesterday. The British pound will strengthen slightly while the negotiations go on, but if they break down expect major losses in the GBP.
Last but not least, Germany decided to extend its lockdown over the Christmas and New Year’s holidays since the current lockdown did not lower the infection rate in the country. All non-essential businesses will remain closed at least until January 10.
