Global stocks soared on Friday, December 8, as a breakthrough in Brexit negotiations added momentum to an upswing underpinned by strong economic news from China and Japan.
Britain and the European Union struck a deal on Friday to move on to talk about trade and a transition period after they agreed the outline of their divorce.
Shares across the continent surged on the news, and even Britain’s FTSE 100 Index .FTSE, which tends to move inversely with sterling, was higher through the day despite an early rally for the British currency.
Sterling was up nearly half a percent against the euro EURGBP=D3 at one stage. And though the rally lost steam as the session wore on, it was still close to a six-month high against the single currency hit earlier in the session EURGBP=D3.
“I think we’ve seen a classic case of the rumor being bought and the fact sold, with sterling having rallied early last week in anticipation of a deal being close,” said OANDA analyst Craig Erlam.
“We could see more upside in the pound in the coming months but as it was before, the road ahead is bumpy and that will be reflected in the currency markets.”
The pan-European share index rose 0.8 percent, pushing the MSCI world equity index .MIWD00000PUS, which tracks shares in 47 countries, up 0.2 percent.
European banking shares were amongst the biggest gainers after financial regulators reached a long-sought deal on Thursday to harmonize global banking rules, but said the rules would take effect in 2022, later than previous expectations for 2019.
The dollar rose 0.2 percent against a trade-weighted basket of its rivals on Friday .DXY and was on track for its biggest weekly rise in nearly six weeks after a potential government shutdown this weekend was averted.
Attention is likely to turn to U.S. jobs numbers due out later on Friday, particularly with a key Federal Reserve meeting due next week.
According to a Reuters survey of economists, the Labor Department’s closely watched employment report is likely to show that nonfarm payrolls rose by 200,000 jobs last month after surging 261,000 in October.
The report probably will have little impact on expectations that the Federal Reserve will raise interest rates at its Dec. 12-13 policy meeting, but it could help shape the debate on monetary policy next year.
Iron ore and copper imports enjoyed a stellar rebound, which could help stem a recent pullback in commodity prices.
Japan’s Nikkei .N225 led the way as the yen eased on the dollar, rising 1.1 percent on top of Thursday’s 1.45 percent bounce to be almost back where it started the week, Reuters reports.
