As the UK started to vaccinate its most vulnerable citizens, the US approved the BioNTech/Pfizer vaccine. However, global stocks generally eased amid rising fears of a no-deal Brexit and a continued rise in new Covid-19 infections in Europe, the US, Japan and South Korea.

UK

The FTSE 100 eased 0.1% over the week, with bank shares among the weakest performers.

The likelihood of a no-deal Brexit increased over the week with both the UK and the EU agreeing that significant differences remained between the two sides., particularly on the issue of how to police a ‘level playing field’. Having agreed to set a deadline of Sunday by which to reach a deal, the two sides agreed to carry on talking into the following week. In separate news, the UK signed a trade deal with Singapore.

Bank of England governor Andrew Bailey indicated the UK central bank was undertaking “extensive work” on how to implement negative interest rates.

UK GDP grew 0.4% in October, a sharp slowdown from the 1.1% growth recorded in September. While manufacturing and construction activity expanded, growth in the UK’s dominant services sector ground to a standstill.

AstraZeneca announced it was to buy biotech firm Alexion in $39bn immunology deal.

US

The S&P 500 fell 1.5% over the week.

The US Supreme Court dismissed a last-ditch attempt by the state of Texas to discount the results in Wisconsin, Pennsylvania, Michigan and Georgia. The US electoral college is due to cement the election result on Monday 14 December.

In its forthcoming policy meeting, the Federal Reserve is expected to announce it will continue the $120bn per

month in debt purchases launched at the start of the pandemic until the recovery meets certain conditions.

New jobless claims accelerated to their highest level since mid-September, rising to 853,00 in the last week.

IPOs from Airbnb and delivery service DoorDash met with strong demand.

Europe

The FTSEurofirst 300 slid 0.9% over the week.

The European Central Bank expanded its €1.35tn emergency bond-buying programme by another €500bn and extended it to March 2022. ECB president Christine Lagarde indicated that not all of the increased sum available under the bond-buying programme needed to be used “if favourable financing conditions can be maintained” and that the amount could be “recalibrated” if necessary.

The EU settled a dispute over its budget and recovery plan after Hungary and Poland dropped objections to a new mechanism of tying payments to ‘rule of law’ principles.

Germany is to go into a hard lockdown over the Christmas period, with all non-essential shops shutting, as the number of deaths and infections from Covid-19 reaches record levels.

Japan

The Nikkei 225 slipped 0.4% over the week.

Pacific Basin

Chinese consumer prices fell 0.5% in November on a year-on-year basis, the first negative reading in more than a decade.

China’s exports grew 21.1% year on year in November, marking their fastest pace this year in November.

Bonds

The yield on the 10-year US Treasury bond closed the week at 0.88%, while the 10-year German Bund yield ended at -0.64%. Meanwhile, Italian, Spanish and Portuguese 10-year yields fell to their lowest levels on record.

Australia has sold short term treasury bills at a negative yield for the first time in its history, joining Japan and a raft of European nations.

Currencies

Sterling weakened as the UK and EU failed to resolve their differences over a trade deal.

Commodities

Oil prices, as measured by Brent crude, breached $50 a barrel, reaching their highest level since early March.

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Image by DANIEL DIAZ from Pixabay