Trump signs stimulus bill, attack on Alibaba, Sterling collapses – what’s new in the markets


By Geoffrey Smith – President Donald Trump signs the coronavirus relief package into law, pushing stock futures higher and the dollar lower. China steps up regulatory campaign against Ali Baba Founder Jack Ma’s business empire and the Pound Relief Rally run out of steam as the market realizes the limits of last week’s free trade deal with the EU. Here’s what you need to know about the financial markets on Monday, December 28e.

1. Trump signs a stimulus package

President Donald Trump has enacted the $ 900 billion coronavirus relief package agreed to before Christmas by Congress.

Trump initially refused to sign the bill, due to his objections to the spending provisions in a separate bill that maintains government funding over the next few months. Both bills, however, were passed in Congress with majorities large enough to overturn a presidential veto.

The House of Representatives is expected to vote later on increasing direct payments to households to $ 2,000 from the $ 600 provided for in the stimulus bill. While House Democrats have indicated they will support the bill, it is likely to be blocked by the Republican-controlled Senate, which will meet again on Tuesday.

2. PBoC steps up campaign against Ma’s business empire

Shares of Alibaba (NYSE 🙂 in Hong Kong fell 8% overnight after the Chinese central bank launched another attack on its financial services subsidiary Ant Group.

Pan Gongsheng, vice-governor of the People’s Bank of China, accused the group of “regulatory failures” in comments posted on the PBoC website on Sunday. Pan said the group should “rectify” its consumer credit and wealth management operations, which operate with much larger profit margins than its core payments business.

The comments add to evidence of a concerted Beijing-led campaign to reduce the wealth and influence of Alibaba founder Jack Ma. Chinese antitrust regulators opened an investigation into the e-commerce giant’s operations last week. only, lowering its shares 13% in New York on Friday. Regulators had previously thwarted Ant Group’s plans for a $ 37 billion IPO earlier in the fall. Alibaba shares have fallen by more than a quarter since then.

3. Stocks are up, dollar is down as Trump’s action supports risk appetite

U.S. stock markets are expected to open later in response to President Trump’s about-face on the stimulus bill.

As of 6:15 a.m. ET (11:15 a.m. GMT), were up 167 points, or 0.6%, while they were up 0.7% and up 0.7%.

The UK-EU divorce deal also supports the sense of risk in other assets, avoiding a worst-case scenario at the border as post-Brexit bridging deals expire this week.

The, which tracks the greenback against a basket of advanced economy currencies, slashed losses overnight to trade down 0.1% to 90.175, while the edged up slightly to 0.95 %.

4. Sterling’s rescue rally runs out of steam

The pound rally ran out of steam as awareness of the free trade agreement reached on 11e Over the past week, many long-term questions about UK-EU relations remain unanswered.

The pound sterling and the euro rose after the two sides concocted a deal which, for now at least, ensures that there will be no tariffs or quotas on the vast majority of trade in goods .

However, British Prime Minister Boris Johnson acknowledged that the deal did not guarantee sustainable access to the EU’s single market for the key financial services sector, which generates more than 10% of the UK’s gross domestic product. United.

As of 6:15 a.m. ET, the drop is 0.5% to $ 1.3487. It was also down 0.6% from 1.1046.

Performance was better, rising 0.1% to $ 1.2201, as Germany, dominated by exporters, hit an all-time high early in the session.

5. Futures contracts on Natgas plunge to their lowest for 3 months

in the United States fell 8% as weather forecasts continue to show no signs of a prolonged cold snap.

The first month’s contract fell to $ 2.31 per mmBtu, its lowest since early September.

Exceptionally warm weather comes at a time when natural gas storage levels are still above their historical averages. The latest EIA inventories were more than 5% above the level of the previous year and the five-year average.


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