Equity markets expected to decline, worried about Brexit and the US economy 
 
Eurostoxx 50 3,522.31 points -0.19% 
CAC 40 5,549.65 points +0.05% 
DAX 30 13,295.73 points -0.33% 
FTSE 100 6,599.76 points +0.54% 
SMI 10,395.96 points -0.33% 
AEX 618.10 points -0.26% 
BEL 20 3,680.11 points -0.40% 
IBEX 35 8,182.30 points -0.64% 
 
DJIA 29,999.26 points -0.23% 
Nasdaq 12,405.81 points +0.54% 
S&P 500 3,668.10 points -0.13% 
 
Nikkei 225 26,652.52 points -0.39% 
 
Exchange rate at 06:50 
Change from closing in New York 
 
EUR/USD 1.2158 +0.13% 
EUR/JPY 126.45 -0.08% 
USD/JPY 104.02 -0.20% 
 

TO FOLLOW IN FRANCE

Prime Minister Jean Castex announced Thursday evening a partial lifting of the lockdown introduced at the end of October, due to a less favorable than expected evolution of the coronavirus epidemic. Among the measures that will come into force on December 15, interregional travel will be possible but a curfew will be established between 8 p.m. and 6 a.m., with the exception of December 24. The reopening of cinemas, theatres and museums is postponed by three weeks.

In the news of the companies, the pharmaceutical group Sanofi and its British partner GlaxoSmithKline (GSK) announced on Friday that their vaccine program against Covid-19 had fallen behind schedule and that their product would not be available until the fourth quarter of 2021.

The luxury group Kering announced Thursday evening that its board of directors had approved the payment of an interim dividend of 2.50 euros for the 2020 financial year.

The group of retirement homes Korian announced Thursday that it has entered into a new partnership with the real estate company Aedifica, which owns the walls of part of its establishments in Belgium and the Netherlands. The partnership takes the form of an equally owned joint venture, which will invest in the development of new real estate projects in the Netherlands, the group said in a statement.

The pan-European stock exchange operator Euronext announced on Thursday a recomposition of its indices in France, which will result in the entry of four new companies into the SBF 120, while the CAC 40 remains unchanged.

Biotech lab Genfit and flooring specialist Tarkett will be excluded from SBF 120 on Dec. 21, Euronext said in a statement. The index will host energy storage company McPhy Energy, food packaging manufacturer Verallia, real estate developer Kaufman and Broad and commercial real estate company Carmila.

On Friday, Diagnostic Medical Systems, Ramsay Générale de Santé and Vilmorin & Cie hold their annual general meeting, while Samse brings together its shareholders in an extraordinary general meeting. An ordinary general meeting of Bigben Interactive is also on the program.

On the macroeconomic side, payroll employment figures for the third quarter will be released at 8:45 a.m.

actions

European equity markets are expected to open slightly lower on Friday, amid growing concerns about Brexit and new doubts about the health of the U.S. economy.

In addition, as part of a summit in Brussels, the leaders of the European Union found an agreement on Thursday for the European recovery plan, thanks to a compromise that made it possible to rally Poland and Hungary, according to AFP. The implementation of this plan, adopted in July, was blocked by the veto of both countries.

Around 7:40 a.m., the CAC 40 futures contract lost 16.5 points, or 0.3%, according to data from broker IG Markets. The DAX 30 contract gave up 36.5 points, or 0.3%, and the FTSE 100 contract gave up 9.7 points, or just under 0.2%.

British Prime Minister Boris Johnson said it was very likely that negotiations on a new trade deal with the European Union would fail. For its part, the European Commission has established emergency measures to maintain connectivity for rail, air and freight transport between the UK and the bloc in case negotiations fail.

Both sides are bracing for major border disruptions on January 1, which will affect nearly $900 billion a year in trade, as well as personal and business travel, while the UK's current trade and security ties with the bloc will disappear on that date.

The new obstacles at the border would be reduced, but not eliminated, if an agreement on their future relationship were reached. Boris Johnson's pessimism and the EU's emergency measures presented on Thursday testify to the mutual awareness that a deal may not be reached in time.

In the United States, Republican senators said Thursday that they would not accept the compromise that a group of lawmakers from both parties is negotiating on financial assistance to local authorities and legal protection for businesses opened during the pandemic. This stance undermines the bipartisan attempt to bring negotiations to a $908 billion plan to support the economy to a successful conclusion.

In addition, a committee of independent experts on Thursday recommended the approval of the coronavirus vaccine developed by Pfizer and BioNTech, paving the way for an emergency authorization of the product by the Food and Drug Administration as early as Friday.

The New York Stock Exchange ended lower on Thursday with the exception of the technology segment, penalized by fears of a slowdown in the economic recovery after the announcement of a rise in unemployment registrations last week in the United States.

In Asia, the main stock market indices posted a mixed performance on Friday. The Nikkei index fell 0.4% in Tokyo and the Shanghai Composite index lost 0.9% at the end of the session. The Hang Seng gained 0.3% in Hong Kong.

Obligations

U.S. Treasury yields are little changed Friday morning, after falling on Thursday due to rising demand for safe haven assets due to the deadlock in negotiations on the stimulus plan.

The ten-year bond yield fell 3.4 basis points to 0.907% on Thursday, while the two-year Treasury fell 1.2 basis points to 0.139%. The 30-year bond yield fell 5.1 basis points to 1.635%, its largest decline since Nov. 12.

An auction of 30-year U.S. Treasury securities has sparked strong interest, market participants say, after reports emerged that Senate Majority Leader Mitch McConnell warned that some Senate Republicans would not accept the bipartisan proposal for a $908 billion stimulus. The highest yield at which the securities were invested was 1.7 basis points below the highest rate expected at the start of the auction, a sign of strong demand.

"Demand for safe and mature assets is still strong, despite hopes for a Covid vaccine," said Thomas Simons, money market economist at Jefferies.

FOREIGN EXCHANGE

The euro appreciated Friday morning against the dollar but fell against the yen, like the greenback.

Sterling is recovering against the euro and the dollar, after falling sharply this week. The British currency was penalized on Thursday by reports that the British government would not accept the emergency measures announced by the European Commission in the event of a no-deal Brexit. British Prime Minister Boris Johnson said the country would study the proposals but had its own contingency plan.

Oil

Oil prices continue to gain ground Friday morning, with Brent remaining above the $50 mark, reached Thursday for the first time in nine months. The market is supported by progress towards Covid-19 vaccines, which could help revive the economy next year.

At 7:30 a.m., the February contract for North Sea Brent gained 4 cents to $50.27 a barrel, while the January contract for Nymex-listed light sweet crude (WTI) was up 7 cents to $46.86 a barrel.

MORNING BULLETIN: December 11, 2020 -2-

Crude could be well supported in the short term, and Asia is expected to continue to contribute significantly to physical demand with "uninterrupted oil purchases" from China and India, Axi said.