It might be a bit late, but there were signs of a – tax bill-inspired – Santa rally this morning, with the European indices opening sharply higher.
With Senate and House Republicans coming to an agreement over the weekend, and the prospect of the tax bill being passed later this week – giving Trump his first major victory since taking office in January – the markets were in party mode this Monday.
The tone was set by the Dow Jones futures, which have the US index surging 150 points to just shy of 24800 later this afternoon. This in turn helped the FTSE climb to a 6 week peak of 7530 after rising 0.7%, with the DAX and CAC both up 1% apiece.
Interestingly the dollar didn’t get the same boost as the Dow – the greenback actually fell 0.2% against both the pound and the euro. Granted, cable has a way to go before it can claw back all of last Friday’s Brexit-weary losses, with sterling still the wrong side of $1.34.
There’s little to really disrupt the tax ‘reforms’-based trading this Monday. The final Eurozone inflation reading for November is set to remain unchanged at 1.5%, while the UK CBI industrial order expectations is forecast to dip from 17 to 14 month-on-month. In general the first half of the week is pretty quiet, with the main data – namely the final US and UK Q3 GDP readings – not coming until Thursday and Friday.
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