European stocks rose early on Thursday, as the market eagerly awaited the prospect of a trade deal between the U.K. and the European Union before the year-end deadline, with the pound and euro trading strongly against a clobbered dollar.
were up 138 points, or 0.5%, with the Dow Jones Industrial Average
set to open near record highs after falling more than 44 points on Wednesday and closing at 30,154.
Trade negotiations between the U.K. and EU are in their final stretch after a deadline of last Sunday was extended, sparking optimism that a deal could be done. Come Jan. 1, the U.K. will complete its exit from the EU with or without a trade deal, and key issues remain unresolved.
“Markets in Europe have continued to push higher this morning as the landing zone for an EU-U.K. trade deal starts to come into view,” said Michael Hewson, chief market analyst at CMC Markets U.K.
“As far as an EU-U.K. trade deal is concerned, it would appear that fishing rights are the last significant obstacle for an agreement to be put to the U.K. parliament sometime in the next week or so, with reports of talks entering a ‘tunnel’ helping the upbeat mood,” Hewson said.
Optimism in Europe has the pound
both trading dominantly against a weakened dollar. Sterling was near a two-year high against the dollar, while the euro hit a two-and-a-half-year high against the dollar yesterday before paring gains.
has sunk relative to other currencies as the market continues to hope for a $900 billion coronavirus-stimulus bill. On Wednesday, the Federal Reserve said it would continue buying up bonds until the economy reaches full employment, as Fed officials continue to push Congress for stimulus. The U.S. dollar index fell below 90 for the first time since April 2018.
Shares in WPP
surged more than 3%, as the world’s largest advertising group led the FTSE 100 into the green. The company released a bold medium-term plan ahead of an investor presentation scheduled for Thursday afternoon, including double-digit earnings per share growth over the next three years, and a new policy for dividends to be set at around 40% of headline EPS.
was a standout in Germany, with the stock trading 2.5% higher. Earlier this week, the European sportswear giant said it was considering selling its Reebok brand.
European car makers have ticked up across the board even as the European Automobile Manufacturers’ Association said new car registrations fell 13.5% in the EU, U.K., and countries of the European Free Trade Association in November. Shares in Volkswagen
were all higher.