S&P 500 futures rise on tentative US-China trade deal and Brexit optimism

  • Futures on the S&P 500 are reporting gains in Asia on US-China trade optimism. 
  • The pound is flying high on exit polls forecasting big win for Prime Minister Boris Johnson.
  • Big majority for Johnson is seen paving the way for more decisive Brexit negotiations. 

The futures on the S&P 500 are flashing red in Asia as investors are buying risk on talk of tentative US-China trade deal and Brexit optimism. 

The futures are currently trading at 3,179, representing a 0.32% gain on the day. 

Treasury yields are also gaining ground on improved risk appetite. The 10-year US government bond yield is currently reporting a 14 basis point gain. 

Stocks rallied to record highs in the overnight trade after President Trump tweeted that the US and China are close to signing a trade deal that would avert another round of tariffs due to start on Sunday.

As per the latest reports, the deal could be announced as soon as Friday and China have agreed to purchase $50 billion worth of US agricultural goods. 

Brexit optimism

GBP/USD jumped from 1.3163 to 1.3515 in the 60 minutes to 23:00 GMT on Thursday, after exit polls forecasted a landslide victory for Prime Minister Boris Johnson's Conservative party. 

Assuming the poll is accurate, Johnson’s Withdrawal Agreement is certain to get through parliament by the current Brexit deadline of Jan. 31, said Bloomberg economist Dan Hanson.

It would reduce some of the uncertainty that has plagued the economy since the country voted to leave the EU in June 2016.

A decisive Conservative victory would also make way for the Prime Minister to make good on his promise to quickly name the next Bank of England governor. 

All this is supportive of the risk assets.

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