Morning Report – Friday 18th December

Main Headlines

There was a small snag in Brexit negotiations as fisheries remain a major sticking point. The €750 billion Covid-19 recovery package also complicated matters as Boris Johnson has concerns over EU state-aid policy.

The US looks set to be the first country to authorise two vaccines after the FDA decided to grant emergency approval to Moderna after it was endorsed by an advisory panel. In other Coronavirus news, French President Emmanuel Macron tested positive for the virus yesterday.

GBP

The pound is slightly lower against the euro and dollar in trading this morning. Sterling has retreated from two-and-a-half year highs, after a small Brexit setback yesterday but officials are still confident that we will get a deal before Christmas. The UK is also set to release data on November retail sales, which can be discarded as they are heavily distorted by the second lockdown.

EUR

The euro is mostly unchanged against the dollar in early morning trading today. China and the EU agreed plans in principle for a bilateral trade agreement, and is set to build on the $650 billion in trade last year. Germany will also release CPI data which is likely to be disappoint to the downside.

USD

The dollar is mostly unchanged against most major currencies, although is rising against the Japanese Yen. Despite optimism earlier this week that a relief package is set to be agreed, senior leaders are still ironing out details. Senators will have to decide today whether they pass a stop-gap bill or push to complete the omnibus bill by midnight.

Markets

Global equities took a pause after a week of gains as doubts emerged over US fiscal stimulus, Brexit and growing US-China trade tensions. S&P 500 futures have pulled back from a record high, while treasury yields and oil prices ticked lower.

Main Economic Data/Central Banks/Government (All times GMT)

7:00 a.m.: U.K. Nov. Retail Sales
7:00 a.m.: Germany Nov. PPI
9:00 a.m.: ECB Oct. Current Account
9:00 a.m.: Germany Dec. Ifo Survey
9:00 a.m.: Spain Oct. Trade Balance
10:00 a.m.: Italy Nov. PPI
10:30 a.m.: Russia Rate Decision
4:00 p.m.: Russia Nov. Unemployment, Retail Sales
6:00 p.m.: U.S. Baker Hughes Rig Count