Wall Street set for muted open ahead of stimulus deal deadline

LONDON (Reuters) – Wall Street headed for a muted open on Friday after hitting record highs in the prior session on hopes that Washington will finally agree on a COVID-19 stimulus package as Americans prepare to get vaccinated.

FILE PHOTO: A Christmas tree is pictured outside the New York Stock Exchange during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., December 16, 2020. REUTERS/Carlo Allegri

U.S. stock futures were little changed, with no major data to give investors a steer as the last full week of trading in 2020 winds up.

Tech major Microsoft Corp eased pre-market after it said it found malicious software in its systems related to a massive hacking campaign disclosed by U.S. officials this week.

Shares in U.S. package delivery company FedEx were likely to come under pressure after it gave no earnings forecast.

The dollar remains in poor shape after a week-long drubbing, with U.S. stock futures flat.

The U.S. Congress faced a deadline on Friday to agree to a fresh round of COVID-19 aid in what is expected to be a $900 billion piece of legislation to take a pandemic that has killed nearly 309,000 Americans.

“I does feel like we have a particularly light schedule in terms of events with markets in the U.S. going to be focused on the ongoing negotiations to see if we can get things over the line,” said Ned Rumpeltin, European head of currency strategy at TD Securities.

Republican Senate Majority Leader Mitch McConnell said the chamber would remain in session through the weekend if necessary, but Rumpeltin said a deal on aid “feels fully priced in” already.

“It could be a sell-the-fact reaction,” Rumpeltin said, though any downside for markets could be limited by the prospect of a fresh round of aid in the New Year as the new U.S. administration of President-elect Joe Biden takes office on Jan. 20.

Markets were also encouraged that the United States stood ready to ship 5.9 million doses of a new coronavirus vaccine developed by Moderna.

U.S. President Donald Trump tweeted ahead of the U.S. open that the vaccine has been “overwhelmingly approved” with distribution to start immediately.


European shares were providing little impetus, with bourses barely changed on Friday as Britain and the European Union remained bogged down over fishing rights in Brexit trade deal talks.

Shares in London, Frankfurt and Paris were barely higher.

But euro zone government bond yields extended early gains as a stronger-than-expected German IFO institute business morale index weakened demand for safe-haven assets.

A gauge of consumer confidence in Britain jumped by the most in eight years this month, boosted by the country’s coronavirus vaccine programme.

A more pessimistic tone on Friday to Britain’s protracted talks with the EU weakened the pound, with only days remaining before the UK leaves the bloc’s single market on Dec. 31.

The EU warned there were just hours left to strike a deal, undermining British domestically focused mid-caps as the prospect of trade tariffs in the New Year loomed.

“The EU-UK talks could well go right up to the wire as neither side wants to be seen be giving in too easily. It’s all about the optics for both sides, so it could take a little bit longer than most people are comfortable with,” said Michael Hewson, chief market analyst at CMC Markets.

The British pound slipped 0.3% to $1.3544, off the two-and-a-half-year high it hit on Thursday.

Asian shares slipped on Friday after Reuters reported that the United States is set to add dozens of Chinese companies, including the country’s top chipmaker SMIC, to a trade blacklist later in the day.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.4% from Thursday’s record. Mainland Chinese shares fell 0.35% while Hong Kong’s Hang Seng lost 0.67%.

Japan’s Nikkei dipped 0.2%, facing strong resistance around 27,000.

The dollar index stood at 89.84, having slipped below 90 for the first time in two and a half years.

The euro traded at $1.2265, having hit a two-and-a-half-year high of $1.2273 on Thursday.

Bitcoin rose 0.7% to $22,986 after breaking $20,000 on Wednesday, setting off a fresh wave of buying.

Spot gold eased to $1,885.93 per ounce from a one-month high of $1,896.2 the day before. Copper touched its highest levels in almost eight years.

Oil climbed to a nine-month high before easing in Asia on Friday. Brent crude futures traded at $51.39 a barrel, down 0.2% on day but not far from Thursday’s peak of $51.90.

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