Reuters - Stock indexes started the week with gains as market participants weighed up the chances of added U.S. fiscal and monetary aid for virus recovery and as the British pound rose in relief as there was a last-minute extension to Brexit talks.
Progress on coronavirus vaccines helped sentiment - with the first shipments sent out across the U.S. as part of a mission to inoculate more than 100 million people by the end of March.
E-Mini futures for the S&P 500 responded by rising 0.5% while March Treasury bond futures slipped 5 ticks.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1% - having hit a string of records last week.
Japan's Nikkei added 0.4% as a survey showed the mood among hard-hit Japan businesses had improved in the December quarter.
Sterling firmed on both the euro and the dollar after Britain and the European Union agreed to continue talks on post-Brexit trade beyond Sunday's deadline.
Against the dollar, the pound rose 0.7% to $1.3314 and away from Friday's close of $1.3222. The euro slipped 0.5% to 91.09 pence, off a three-month top of 92.29.
"Our base case remains that a 'thin' free trade agreement will be reached before the end of the year," Goldman Sachs said. However, "there is plenty of uncertainty and our economists, given the lack of progress in recent weeks, now see rising risks of a no-deal outcome."
That could see the euro climb to 96.00 pence while a deal could send the pound to 87.00 per euro, Goldman predicted.
The single currency has already been charging against the U.S. dollar - which many analysts believe has entered a cyclical downtrend as the prospect of a vaccine-driven international economic recovery lessens the need for safe havens.
The euro was up 0.2% Monday at $1.2135 and within striking distance of its recent 31-month top of $1.2177. The dollar index eased to 90.734 and nearer to its recent trough of 90.471.
An added hurdle for the dollar will be the Federal Reserve's policy meeting Dec. 15-Dec. 16. The market is assuming the central bank will refine its forward guidance on policy only rather than buying more bonds or "twisting" its portfolio to add more longer-dated debt.
"The risk is then if Federal Reserve does unveil a surprise twist at this meeting, then Treasurys could rally and the USD could fall," NABdirector of economics Tapas Strickland said.
An extra wrinkle is the chance of a U.S. deal on fiscal stimulus after a top Democrat hinted they might compromise to get an agreement past Republican objections.
All the talk of stimulus has helped put a floor under gold - leaving it a shade lower at $1,836 an ounce. Considered a hedge against inflation and currency debasement gold has gained more than 21% this year.
Oil prices edged higher Monday having now rallied for six weeks straight as market participants priced in an international recovery next year.
U.S. crude firmed 11 cents to $46.68 a barrel while Brent crude futures rose 12 cents to $50.09.