MORNING BID-All I want for Xmas is a Brexit deal
(There will be no Morning Bid on Dec 25 and Dec 28 because of Christmas holidays)
LONDON, Dec 24 (Reuters) - A look at the day ahead from Sujata Rao Markets are looking past risks of a year-end U.S. government shutdown and focusing squarely on a Brexit deal which apparently is about to be clinched, ending 4-1/2 years of recriminations, market volatility and, of late, chaos at the Anglo-French border. The last may even have lent the talks extra impetus -- find an agreement or face more of the same after Dec. 31.
World shares are up, European bourses (on what will be a shortened trading day) are opening higher. The pound is up half a percent and waiting for concrete news before making a move towards the 2-1/2-year highs hit last week against the dollar.
Elsewhere, news isn't that positive. Alibaba's Hong Kong-listed shares slumped 8.13% after China said it would investigate the tech giant for suspected monopolistic behaviour.
President Donald Trump, with less than a month to go in office, has threatened to veto a $2.3 trillion funding package, which includes a pandemic relief deal.
A government shutdown -- a repeat of one Trump triggered two years ago -- would come at the worst possible time -- pandemic vaccinations are in full swing and this week's data underscored steady economic deterioration, with high unemployment as well as weakening consumer spending, home sales and incomes.
But the risk-on mood, confidence in a 2021 economic rebound and the prospect of more stimulus under a new White House administration are weighing on bonds, with U.S. 10-year yields scaling 0.94% and the 2-year/10-year yield gap to the widest since 2017. UK 10-year yields are poised to go higher too after Wednesday's 10 basis-point jump to 0.31%.
On emerging markets, all eyes on Turkey where the central bank may deliver a 150 basis-point interest rate hike as the new governor attempts to restore credibility.
(Edited by Karin Strohecker)
