Brexit, China exports, European data and California

8 дек. 2020 г.

From the point of the price dynamics in financial markets, Monday was remembered primarily by the pound moves. Paired with the US dollar, the decline reached 200 points. The reason is obvious - Brexit. Markets expected that over the weekend the last contradictions would be resolved and the parties would begin to sign a trade agreement. Instead, the UK and the EU have confirmed their differences. Nothing new, but the problem is that the EU leaders' summit on Thursday will be the last real chance to sign and ratify the agreement before the end of the year. This means that the situation is heating up to the limit.

Meanwhile, China reported a sharp increase in exports (21%) in November and once again gave the markets a reason for optimistic thoughts about the future. Although, according to high-frequency data from Bloomberg, the situation in economies where full or partial lockdowns are currently in effect is rapidly deteriorating. Not surprisingly, California (the world's fifth largest economy by GDP) announced a stay-at-home order over the weekend. That is, bars, hairdressing salons, museums, cinemas, etc. will be closed. Retailers are allowed to remain open with a 20% load. Travel is prohibited. The order will be valid for at least three weeks.

But the markets continue to think positively. The issue of stimulus in the US is moving towards a happy ending. And in Japan happy end has already been reached. Japan on Tuesday announced a new $ 708 billion economic stimulus package to accelerate the country's recovery from its deep recession caused by the coronavirus.

In addition, this Thursday, the FDA will review the Emergency Use Authorization (EUA) for the Pfizer coronavirus vaccine candidate. Moderna vaccine candidate is scheduled on December 17.