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US markets close higher in volatile session - EMEA Brief 28 Dec

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  • US equities rallied late on Thursday to close higher in a wild session which saw the Dow finishing 1.1% up, after initially falling over 500 points earlier in the day. The S&P and Nasdaq also fell 2.8% and 3.3% respectively, but both ended in positive territory after the late surge.
  • Donald Trump is said to be considering an executive order which will ban US firms from using equipment built by Chinese companies ZTE and Huawei, according to a Reuters report.
  • Overall, European markets fell in their first trading session post-Christmas. The Dax saw a slide of 2.8%, while the FTSE fell as the day continued ending down 1.5%. The Cac followed by falling 1.1%.
  • Japanese 10-year government bond yields fell by three basis points taking it down to negative 0.004%.
  • Gold rose 0.5% to $1,281.40 an ounce, which is its highest level in over six months.
  • Crude oil also increased yesterday, the price increased to $45.75 a barrel - a 2.5% rise.

UK, US and Europe: Thursday's roller coaster session comes after the historic rally on Wall Street on Wednesday, as the Dow surged over 1,000 points marking its biggest daily point gain. The early sell-off in yesterdays session was sparked by renewed trade tensions between US-China and weak US consumer confidence data for December. Dave Campbell, principal at BOS explained that "The uncertainty will continue to weigh on the market," and "I think that's going to help drive the volatility as we roll forward because I don't think it's going to be a clean path to an agreement or some kind of resolution."

Large end of year FX swap rates: Please be aware that due to year end market factors we are seeing significant moves in the funding rates for most FX pairs. This has been observed across the market, although some pairs are looking to be worse affected than others (most notably if you are short US dollars). These factors include financial institutions balancing their books before the end of the year, putting a strain on certain currencies: Read more here

Economic calendar - key events and forecast (times in GMT)

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Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • The Defence Secretary has highlighted is "very deep concerns" regarding Huawei's involvement in the UK's mobile network upgrade.
  • Cannabis retailer Green Growth Brands Ltd. plans to launch a hostile takeover bid for Aphria Inc. (APHA), which values the marijuana producer at nearly $2.1 billion. 
  • CentryLink, which provides telecommunication services to customers across 37 states, had significant internet and phone outages nationwide yesterday leaving its customers being unable to use their services. 

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