The FTSE 100 is 0.57% lower on Friday as the Brexit saga moves to another deadline on Sunday. Prime Minister Boris Johnson has said there is a “strong possibility” of this outcome but markets are not moving much on this assessment.
The EU and UK will move to World Trade Organisation tariffs on the 1st January if they fail to reach an agreement and markets are maybe becoming complacent about this. The EU have said that further talks would simply restart in the new year but there is potential for position movement by institutional portfolios ahead of this event and we could see volatility. There is also the possibility of delays at ports and this could move down the supply chain to hit businesses such as supermarkets.
Rolls Royce has said its restructuring plans are on target to deliver cost savings of £1.3 billion by 2022 in a trading update. The company expects to be cash-flow positive in the second half of next year, with hopes of £750 million in free cash flow in 2022. The UK has begun rolling out the coronavirus vaccine this week and the US regulator looks set to approve it also. This may not have an effect on markets as Dow futures point lower and the FTSE sees profit-taking on Brexit fears.
The FTSE 100 rallied above the 6500 resistance but the index is moving lower and could fall back into the recent range. Support is down at 6200 near the 50-day moving average. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
