In the given figure, the compass needle shows deflection If we join the free ends of two wires. This shows,

 

 

 

In the given figure, the compass needle shows deflection due to the magnetic effects of electric current.
If we join the free ends of two wires momentarily, there is a flow of current in the circuit and there are some magnetic field lines that generate around the current-carrying wire. So, due to the magnetic effect of the current; the magnetic compass needle shows deflection when the current passes through it.