With Christmas cancelled in the UK, Santa did a U-turn, leaving the markets abandoned and deep in the red.
It was a grand weekend of Tory mishandling, one that has really done a number on the FTSE and the pound. First, on Saturday, Boris Johnson delivered news that the easing of restrictions over Christmas was done for after the emergence of a ‘new strain’ of the virus – a strain the government has been aware of since September, something confirmed by the World Health Organisation.
The announcement led to multiple countries banning travel from the UK, with France going once step further, imposing a 48 hour halt not only on people, but the ‘transport of goods, by road, air, sea or rail’, sparking fears about supplies over the holiday period.
Johnson’s weeks-too-late reneging of a promise he shouldn’t have made – a fixture of the pandemic – meant Brexit didn’t get the top billing it would’ve otherwise.
Nevertheless, the lack of a deal over the weekend contributed to Monday morning’s malaise – even if an agreement is reached, things could be chaos in January due to the missing of Sunday’s European Parliament deadline.
Sterling was distraught, undoing last weekend’s optimism in a flash. Cable sank 1.7%, hitting a 10-day low of $1.328, while against the euro the pound dropped 1.6%, leaving it at a 3-month nadir of €1.086.
Though sterling’s losses did mitigate the FTSE’s own decline, the UK index still shed 50 points, slipping under 6,470.
Without a struggling currency to cushion the blow, the weekend’s Brexit and covid-19 crises ravaged the Eurozone indices. The DAX and CAC both plunged 2%, falling under 13,350 and 5,400 respectively.
In contrast to Europe’s collapse, the Dow Jones is currently only facing a 0.4% drop after the bell. That’s because Congress have finally reached agreement over the $908 billion stimulus plan. Though, looking at the Dow, the index may have already got everything it could’ve from the deal in the run-up to the announcement.
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