The week, and the year, begins with some familiar themes. Brexit is still with us but the seemingly endless negotiating rounds have been replaced with the process of the EU and UK ironing out the practicalities of going their separate ways.
The rush to vaccinate against Covid continues around the world as the struggle to contain the spread of the virus continues.
In the US, the last acts of the 2020 presidential election play out, with a pair of Georgia run-offs that will determine whether the Republicans or Democrats control the Senate when president-elect Joe Biden takes office.
Mr Biden will be declared the official victor of the presidential election on Wednesday, but some of Donald Trump’s supporters in the Republican party are resisting to the bitter end.
After a bumper run of central bank meetings just before Christmas the schedule is quiet this week, with the minutes from the Federal Reserve’s December meeting being the main point of interest.
The monthly US non-farm payrolls will be the main data point to watch this week, while in the UK updates from supermarket Wm Morrison and retailer Next will provide a first look at how the high street fared over the holiday period.
Covid
The UK goes into the week with the seven-day rolling rate standing at almost 400 infections per 100,000 inhabitants. Prime minister Boris Johnson suggested at the weekend that the UK might have to impose stricter measures and delay the opening of schools.
Germany is preparing to extend its nationwide lockdown until the end of January, as governments across Europe consider prolonging or strengthening restrictions to battle highly contagious mutations of the coronavirus.
In France, the government on Saturday moved a nightly curfew in 15 departments in the east and south-east from 8pm to 6pm.
The incidence of Covid-19 in those areas has been climbing more rapidly than elsewhere, prompting local leaders to call for a harsher lockdown. The government has also delayed the reopening of museums and cinemas, promised for Thursday, while restaurants and bars remain closed nationally. Schools will reopen after Christmas holidays on Monday.
Health officials in Ireland have warned that the virus is “out of control” in the country. Deputy premier Leo Varadkar said further restrictions could not be ruled out even after Dublin sharpened its national lockdown last week for the second time in eight days.
The extension of lockdowns in Europe comes amid harsh criticism of the EU’s handling of vaccine procurement and distribution.
France is overhauling its Covid-19 immunisation campaign after a cautious, phased strategy aimed at placating the world’s most vaccine-sceptical population fell flat in its first week.
The country has only vaccinated some 350 people to date — compared with the UK’s 1m and Germany’s 238,000 — although the government has received 500,000 doses of the BioNTech/Pfizer vaccine and will get a similar amount each week in January.
The UK plans to ramp up vaccinations on Monday using 530,000 doses of the AstraZeneca vaccine and has set a goal of vaccinating 2m people a week as soon as possible.
The US, meanwhile, has administered more than 4m first doses of Covid-19 vaccines.
More than 1m Israelis, a tenth of the population, including a quarter of those above 60, have received the first shot of the two-phase BioNTech/Pfizer vaccine, making the tiny country a world leader in coronavirus vaccinations.
The pace of vaccinations, described by a government minister as being in “cautious overdrive”, is expected to continue for another 10 days, as the country burns through its current supplies of the vaccine.
In India two vaccines have been approved. Bharat Biotech’s Covaxin was cleared for emergency use at the weekend but limited data has been publicly released on its efficacy, raising concerns that proper approval guidelines have not been followed. India has also approved the vaccine made by Oxford university and AstraZeneca.
The World Health Organization’s vaccine advisory panel holds a closed-door meeting on Monday to examine the safety and efficacy data of the BioNTech/Pfizer Covid vaccine. It is expected to issue recommendations later in the week.
Vaccine makers race to secure supply chains
US politics
Hundreds of thousands of Georgia voters are expected to cast their ballots in person for two Senate run-offs on Tuesday.
The polls pit Republican incumbents David Perdue and Kelly Loeffler against Democratic challengers Jon Ossoff and Raphael Warnock.
The run-offs are required under state law because no candidate in either race received 50 per cent of the vote in the November 3 election.
More than 2.5m people have voted early in the two Senate run-offs, either in-person or by mail, according to the University of Florida’s US Elections Project, setting a state record for voter turnout in a run-off.
Control of the Senate hangs in the balance, and with it the prospects for president-elect Joe Biden to push his agenda through Congress, where the Democratic party controls the House of Representatives.
If Democrats win both Georgia races, the Senate would be split 50-50, giving Kamala Harris, vice-president, the tiebreaking vote.
Further reading
Raphael Warnock aims to make history in Georgia
Kelly Loeffler’s Trumpian lurch shocks ex-colleagues at ICE
Trump factor boosts Democratic hopes in crucial Georgia races
Mr Biden is on Wednesday due to be officially declared the victor of the 2020 presidential election as the votes of the Electoral College are certified in the US House of Representatives.
However at least a dozen Republican senators will object to the certification as part of a last-minute attempt to overturn the results of November’s election before Joe Biden is sworn in as the 46th US president on January 20.
On Saturday, seven Republican senators, including Ted Cruz of Texas, Ron Johnson of Wisconsin and James Lankford of Oklahoma, as well as four senators-elect, said in a joint statement that they would object to the process of counting and certifying the Electoral College votes in Congress.
Citing unsubstantiated reports of widespread voter fraud, the senators said they would call for an electoral commission “to conduct an emergency 10-day audit of the election returns in the disputed states”.
Republican senators join bid to block certification of Biden win
Elsewhere . . .
WikiLeaks founder Julian Assange’s extradition verdict is expected to be heard in London court on Monday
Bank of England governor Andrew Bailey is due to appear before parliament on Tuesday to answer questions about the bank’s latest Financial Stability report
Saudi Arabia hosts the annual Gulf Arab summit on Tuesday, which was pushed back from December
Companies news and earnings
Fiat Chrysler’s planned $47bn merger with Peugeot maker PSA is set to get the green light, with investors expected to vote to approve the deal that will form Stellantis, the world’s fourth-largest automaker, at two separate meetings on Monday.
Shareholders will sign-off on two years of drama, marked by on-again off-again talks, the transformation of the auto industry and a global pandemic.
Executives hope the merger will boost returns by creating a bigger company with greater resources to compete with electric-car upstarts and tech-industry interlopers, but neither carmaker has much of a foothold in the luxury-car business or China’s vast auto market.
In the UK, Next updates on Tuesday. The fashion chain upgraded its full-year profit forecast for the third time in 2020 in October after sales grew more than expected in Q3.
The group said at that the time that it expected pre-tax profit to be about £365m, up from the £300m forecast at the time of its half-year results in September and ahead of October’s £347m average of analysts’ estimates calculated by Capital IQ.
UK supermarket Wm Morrison updates on Tuesday, when investors will be keen to learn how the all-important festive season played out.
Early Christmas shopping and a second national coronavirus lockdown helped supermarket sales in November as many other retail outlets were forced to close, and this coupled with the usual seasonal increase in activity should bring some cheer.
Investors will also be on the lookout for any updates on Morrison’s partnership with Amazon will be of interest.
UK bakery chain Greggs has a fourth-quarter update on Wednesday, which may bring some clarity on job losses.
UK housebuilder Barratt Developments updates on Friday, with the focus likely to be on construction activity during the latest Covid restrictions. The outlook for 2021 will also be of interest as the UK stamp duty holiday is due to end shortly.
In the US Walgreens Boots Alliance reports on Thursday.
Economic data
Weekly US initial jobless claims climbed above 800,000 in early December before falling below at the end of the month, pointing to a rise in lay-offs as Covid cases surged. The forecast is that Friday’s non-farm payrolls will rise by around 100,000 for December, down from a 245,000 increase in November. The unemployment rate is expected to rise to 6.8 per cent from 6.7 per cent.
Staying in the US, Tuesday’s ISM manufacturing index is forecast to fall to 56.4 in December from 57.5 in November, which will be the seventh consecutive month of activity growth. The ISM services index, out on Thursday, is expected to fall to 54.9 in December from 55.9 in November.
The eurozone’s flash inflation is on Thursday expected to edge up on both core and headline figures.
Germany has Labour market figures for December out on Tuesday, when the strong rebound over the past couple of months is likely to have taken a hit from the national lockdown announced in early December.
Germany’s flash inflation figure is released on Wednesday, industrial orders on Thursday and industrial production data is out on Friday.
France has flash inflation data on Tuesday, consumer confidence on Wednesday — both forecast to remain steady — and an industrial production update on Friday.
Source: Economy - ft.com
