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GLOBAL MARKETS-Stock futures slip as Trump threatens to derail stimulus bill

Published 23/12/2020, 04:05
Updated 23/12/2020, 04:06
© Reuters.

* Trump calls long-awaited stimulus bill "a disgrace"
* S&P 500 futures down 0.5%, European futures fall
* Virus mutation worries weigh on commods, boost dollar

By Tom Westbrook and John McCrank
SINGAPORE/NEW YORK, Dec 23 (Reuters) - U.S. stock futures
fell, commodities slipped and Treasuries edged higher on
Wednesday after Donald Trump threw a last-minute spanner in to
pandemic relief plans by threatening not to sign a long-awaited
stimulus bill in to law.
S&P 500 futures ESc1 were down half a percent by
mid-morning in Asia and European STXEc1 and British FFIc1
equity futures fell by the same margin as the news offset hints
of progress toward a British trade deal with Europe.
In a video posted on Twitter, Trump said the bill - the
result of months of wrangling in Congress - was "a disgrace"
with too much foreign spending, adding he wanted to increase
"ridiculously low" $600 checks for individuals to $2000.
"Really ... you got to be kidding," said Andrew Brenner,
head of international fixed income at NatAlliance in a note
emailed after Trump's message.
"Personally we think the President will sign the bill at the
last possible moment ... but the true reality star will wait
until the end," he said. "Bond markets close 2 p.m. Thursday
while stocks close at 1 p.m. - it may go down to the last
moment."
Ten-year U.S. Treasury futures TYc1 rose two ticks and the
yield on U.S. 10-year government bonds US10YT=RR fell one
basis point in Asia after Trump's tweet.
It also soured sentiment which had caught a boost after
ITV's political editor said in a late-night tweet that separate
sources had raised the possibility of Britain and the European
Union striking a trade deal on Wednesday.
Holiday-thinned markets are also jittery about a highly
contagious new coronavirus strain, which has given support to
the safe-haven U.S. dollar and yen and dragged on the prices of
growth-sensitive commodities from oil to iron ore and copper.
France will re-open borders to Britain on Wednesday, but
much of the world has sealed it off after a significantly more
transmissible mutated coronavirus variant was discovered
spreading swiftly across southern England. Scientists say there is no evidence that vaccines currently
being deployed in Britain will not protect against this variant,
but the possibility has begun to haunt traders. "The worry right now is whether the vaccine is less
effective," said Bank of Singapore currency analyst Moh Siong
Sim.
"All these unknowns are keeping markets edgy, especially
when they have made quite a bit for the year from the rally.
People are keen to say let's take some money off the table."
The U.S. dollar index =USD rose 0.1% as the greenback
generally hung on to small but broad overnight gains. FRX/
The Australian dollar AUD=D3 edged higher to $0.7540 and
most other majors were pretty close to flat, with the euro
EUR= at $1.2171 and sterling GBP= at $1.3390.
Asian stocks steadied, with MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS up 0.1% after
three days of declines. Japan's Nikkei .N225 rose 0.1%,
although gains were concentrated in healthcare and technology
stocks. .T
Both indexes are up more than 60% from March lows.
Oil prices fell to test lows made during a sharp selloff on
Monday, with Brent crude futures LCOc1 last down 1.5% at
$49.35 a barrel and U.S. crude futures CLc1 down 1.5% at
$46.34. O/R

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