Stocks Hold out Hope for VaccineLed Recovery, U.S. Stimulus

Stocks began a busy week with guarded gains as investors gauged the chance of added U.S. fiscal and monetary stimulus, while the British pound rose in relief as a lastgasp extension to Brexit talks dodged a hard divorce.

Progress on coronavirus vaccines cheered risk sentiment, with the first shipments speeding across the United States as part of an historic mission to inoculate more than 100 million people by the end of March.

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, said analysts at JPMorgan in a note.

EMini futures for the SP 500 responded by rising 0.5, while March Treasury bond futures slipped 4 ticks. EUROSTOXX 50 futures added 0.5 and FTSE futures 0.1.

MSCIs broadest index of AsiaPacific shares outside Japan edged up 0.1, having hit a string of record highs last week.

Japans Nikkei rose 0.5 as a survey showed the mood among hardhit Japanese businesses had improved in the December quarter.

Sterling firmed on both the euro and the dollar after Britain and the European Union agreed to continue talks on postBrexit trade beyond Sundays deadline.

Against the dollar, the pound rose 0.7 to 1.3321 and away from Fridays close of 1.3222. The euro slipped 0.5 to 91.09 pence, off a threemonth top of 92.29.

Our base case remains that a thin free trade agreement will be reached before the end of the year, analysts at Goldman Sachs wrote in a…

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