Financial Markets Latest: Brexit hopes and vaccine rollout boost stocks

The FTSE was up on Monday morning
Stocks rose in London and elsewhere in Europe

European stock markets saw marginal gains on Monday morning as Brexit talks continued and the Covid-19 vaccine rollout gathered pace. Tradefair brings you the latest financial market news...

"We think it is responsible at this point to go the extra mile."

- Joint UK/EU statement

Financial markets in Europe have made a positive start to the week, after the UK and EU agreed to continue Brexit trade negotiations for at least a few more days.

Both sides said they were prepared to "go the extra mile" in a final push to get a deal over the line before the transition period ends and the UK completes its withdrawal from the EU on December 31st.

This new glimmer of hope that a no-deal Brexit could be avoided provided a boost for the pound on currency markets.

Investors also appeared to take confidence from the accelerating rollout of the Pfizer/BioNTech coronavirus vaccine. More GP practices across England will give the jab to their patients this week, while the US is also starting the hugely complex process of making the vaccine available nationwide.

Talks continue despite 'exhaustion'

Having previously said talks to finalise a deal should have been concluded yesterday (Sunday December 13), London and Brussels have committed to continue negotiations in an effort to bridge the gaps that remain between the two sides.

There was no confirmation of a timeframe for this final stage of discussions. However, if there is no resolution by December 31, the UK will leave the EU without a deal and trade with the bloc will take place under World Trade Organization rules.

UK prime minister Boris Johnson and European Commission president Ursula von der Leyen released a joint statement saying that, despite "exhaustion" on both sides after almost a year of negotiations and the fact that "deadlines have been missed over and over, we think it is responsible at this point to go the extra mile".

Johnson reiterated that a no-deal Brexit remains the most likely outcome, and stressed that the government has made "huge preparations" for this eventuality.

The continuation of the talks provided some encouragement for stock markets, with the FTSE 100 rising by 0.4% over the course of morning trading on Monday.

Germany's DAX index was even more positive, posting gains of 1.2% by the start of the afternoon, while the CAC 40 in France was up by 1.2%. 

Sterling was also boosted by the hope that a no-deal Brexit could still be avoided, rising against both the euro and the US dollar.

Vaccine tailwind

Along with the last-ditch negotiations between the UK and the EU, the other major theme influencing financial market trends right now is the ongoing battle against the coronavirus pandemic and the global vaccine rollout.

The next stage of the inoculation programme in the UK will see family doctors starting to give jabs over the course of this week, with priority given to over-80s and frontline health and care staff.

In the US, meanwhile, the first three million doses of the Pfizer/BioNTech vaccine are due to arrive at 145 facilities across the country today.

Analysts at JP Morgan commented: "The vaccine has and will likely continue to provide a tailwind to the market that is allowing investors to look beyond record case levels, hospitalisations and deaths."

The pandemic has continued to escalate in parts of the US in recent days, with hospital admissions reaching a record high for the seventh consecutive day on Saturday, according to the Covid Tracking Project.

Data from Johns Hopkins University showed that the number of confirmed coronavirus cases had passed 16 million, after one million infections were registered over just four days.

Stock markets endured a difficult end to last week, with the Nasdaq Composite falling by 1.6% between the close of trading on Tuesday and the end of the week. The Dow Jones Industrial Average was down by 0.4% over the same period.

Wall Street futures indicated a more positive start to this week, however, with the Dow, the Nasdaq and the S&P 500 all expected to open more than 0.5% higher.

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