Morning Report

Morning Report – Monday 7th December

Main Headlines

Brexit negotiations hit a stumbling block over the weekend and there are now real concerns among senior leaders that Britain will end up with no-deal. Boris Johnson and Ursula Von der Leyen spoke on Saturday and agreed to continue talking as a breakthrough was made on French access to British waters, but there is still no resolution on the UK following EU laws.

The UK will begin to administer the Pfizer/BioNTech vaccine on Tuesday, and those over 80 who are attending hospital as outpatients will be the first in the queue to get the vaccine. The Government, in accordance with their guidelines, were supposed to give care home residents and workers the vaccine first, but they have back pedalled claiming getting the vaccine to “residents” is challenging.


The pound is higher against both the euro and dollar this morning as worrying news on Brexit has caused investors to back away from Sterling. Today will once again be dominated by Brexit news and investors may continue to “buy the dip” despite recent news, there is still optimism that a deal will be agreed. However, time is running out to get one before the EU council meeting on 10th December.


The euro is unchanged against the dollar in early morning trading today. Angela Merkel continues to try and resolve issues between EU members and Poland and Hungary over the €1.8 trillion deal on its seven-year budget. Poland is the main aggressor and threatens to tank the rescue package that has been negotiated on since July. There has been chatter of ‘Polexit’, but this is unlikely especially in the short term.


The dollar is higher against most major currencies, although it is unchanged against the Japanese Yen in trading this morning. President Trump and Mitch McConnell are reportedly on board to sign the $908 billion pandemic relief package, amid rising Coronavirus cases and a push to pass the bill during the lame duck period. McConnell, who was originally fervently against a package that size, looks to have his hand forced by growing bipartisan support and a plan to not give Democrats ammo in the lead up to the Georgia Senate run-off election.


The bulls are in complete control as global equities are up despite rising Coronavirus cases in the US and a poor non-farm payrolls report which showed an increase in jobs which was only half of what was expected. Markets have their eyes firmly on the rosy 2021 outlook, ignoring any negative news pertaining to 2020. This does mean however that it could take one bit of negative news to shock the stock market if a “straw that broke the camel’s back” scenario takes hold. Bonds prices are mostly unchanged, while Oil has taken a pause after a positive OPEC+ meeting last week.

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

7:00 a.m.: Germany Oct. Industrial Production
8:00 a.m.: Switzerland Nov. Foreign Currency Reserves
8:30 a.m.: Riksbank Minutes

Deadline for EU stimulus and budget deal