S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures flat as U.S. relief bill agreed
* New strain of coronavirus shuts much of UK
* Pound slips as Brexit talks drag on with no deal
By Wayne Cole
SYDNEY, Dec 21 (Reuters) - U.S. stock futures traded
sideways in Asia on Monday as investors gave a cautious welcome
to news a deal had been struck on a long-awaited U.S. stimulus
bill, though "difficult" Brexit talks dragged on with no
agreement in sight.
Sterling slipped 0.6% to $1.3436 after several European
countries closed their borders to the UK as the country entered
a tougher lockdown to fight a new strain of coronavirus.
Prime Minister Boris Johnson will chair an emergency
response meeting on Monday to discuss international travel and
the flow of freight in and out of Britain. In the United States, Republican U.S. Senate Majority Leader
Mitch McConnell said an agreement had been reached by
congressional leaders on a roughly $900 billion COVID-19 relief
bill. The news saw futures for the S&P 500 ESc1 jump at first,
only to fade back to flat as the morning progressed. Nikkei
futures NKc1 were trading firmer at 26,885, after the cash
index closed at 26,763 on Friday.
Analysts at BofA noted a huge $46.4 billion flowed into
equities in the latest week, while the outflow from cash was the
largest in four months. There were record flows into tech
shares, a large flows to the consumer sector, healthcare,
financials, real estate and value stocks.
BofA chief investment strategist Michael Hartnett said a
"sell signal" had been triggered for the first time since
February as cash levels declined to 4.0% in the latest Global
Fund Manager Survey.
"Positioning is getting over-extended as policy support and
profits are peaking," he said in a note. "Expectations for
higher growth, inflation and lower interest rates have become
consensus and investors are positioning for a very rosy scenario
of low volatility and high growth."
Another popular trade has been shorting the U.S. dollar and
again positioning was looking overextended by many measures,
giving the currency some respite on Monday.
The dollar index =USD edged up a little to 90.147 and away
from last week's trough of 89.723 which had been the lowest
since April 2018.
The euro likewise edged back to $1.2230 EUR= , while the
dollar was a shade firmer on the yen at 103.36 JPY= .
"FX markets await final outcomes of a possible Brexit deal
and U.S. fiscal package," said Ned Rumpeltin, European head of
FX strategy at TD Securities.
"We remain biased to fade any 'good news' kneejerk
USD-selling on both fronts, however. These factors look fully
priced and the short-USD trade appears increasingly crowded."
The pause in the dollar's decline saw gold prices pare a
little of their recent gains, dipping 0.3% to $1,880 an ounce
XAU= . GOL/
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(Editing by Sam Holmes)