Europe will be very much the focus of attention this week with a long-awaited European Central Bank meeting, an EU summit and the “last throw of the dice” for Brexit talks.
It’s a big week pandemic wise for the UK too, as the country prepares to roll out the BioNTech/Pfizer vaccine.
In the US a bipartisan group of US senators will unveil legislation as early as Monday for additional fiscal stimulus worth about $900bn, in an effort to speed up aid to an economy at risk of a further dip owing to a record spike in coronavirus cases.
For companies, Rolls-Royce and Ocado have trading updates towards the end of the week.
On the macro front it’s a relatively quiet week but there are Chinese trade data and manufacturing reports from Germany and France.
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EU summit
EU leaders will meet in Brussels on Thursday and Friday to discuss core issues for the bloc, including the approval of the next budget along with the €1.8tn recovery package, the ratification of the 2030 climate goals and the Brexit deal as trade talks enter the end game.
The budget row with Poland and Hungary is threatening to increase the tension between members, overshadowing what was meant to be an important day to showcase the EU’s commitment to new emissions targets internationally.
Last Friday, EU budget commissioner Johannes Hanes warned Warsaw and Budapest that Brussels could cut them out of its recovery fund as he confirmed that the commission’s lawyers had found possible routes to overcome the countries’ objections to the upcoming spending plan.
But these are not the only things that are brewing in the EU’s cauldron. French President Emmanuel Macron has been accused by British officials of introducing new demands as Brexit talks potentially extend to the summit.
European Commission President Ursula von der Leyen has to contend with other disgruntled governments, including the Netherlands, Denmark, Belgium, Spain and Italy.
Further reading
Poland’s EU budget veto stokes talk of ‘Polexit’
EU budget fight threatens to spill over into climate targets
Coronavirus
The UK’s NHS will be busy preparing to roll out the BioNTech/Pfizer vaccine.
The UK’s Medicines and Healthcare products Regulatory Agency approved the coronavirus jab last Wednesday. The US Food and Drug Administration is expected to issue its verdict in mid-December with the EU regulator not expected to follow suit before the end of the month.
The BioNTech/Pfizer vaccine will be initially distributed to British hospitals that have the capacity to store it safely, as it requires to be kept at minus 70C, and it is likely to be administered first to care home staff, NHS staff and patients.
Medicines agency says Brexit won’t hit UK vaccine rollout
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Figures issued by the Office for National Statistics on Friday show that the rate at which coronavirus is spreading across the UK population has slowed markedly. On the other hand, in the US, Covid-19 cases, deaths and hospitalisations have rocketed in recent weeks.
New York City’s elementary schools are due to reopen their doors on Monday. Schools have been a contentious topic in the US during the pandemic.
US teachers resist reopening schools despite European lessons
Ghana election
Ghanaians choose their president on Monday when the incumbent, Nana Akufo-Addo of the centre-right New Patriotic party, faces John Mahama, a former president from the opposition National Democratic Congress, who held office from 2012 to January 2017.
Mr Akufo-Addo is seeking a second four-year term and is expected to beat his opponent.
Africa watches with envy at Ghana’s ‘boring’ presidential race
Earning reports
Ocado, which is now part of a joint venture with Marks and Spencer, has a trading update on Thursday.
The UK online food retailer raised its full-year profit forecast last month, cementing its position as one of the corporate winners from a pandemic that has driven more people to shop online.
Rolls-Royce updates on Friday, a month after it raised £2bn from shareholders to survive the pandemic. The struggling British aero-engine maker is expected to report on its progress on temporary closures and cuts to hours.
Asana will publish its third-quarter results on Wednesday, the first investor update since the software company’s IPO in September.
Tech group Oracle, which has recently been in the news for a legal battle with Google and its attempt to buy TikTok’s US operations, is due to report on Thursday, together with rival Adobe.
Tour operator Tui will publish its fourth-quarter earnings on Thursday as it reveals the damages of what has been a catastrophic year for the travel industry. The company came under fire in November for refusing to enrol 550 cabin members on seasonal contracts in the UK’s furlough scheme.
US big box retail chain Costco, UK rail and bus operator FirstGroup, yogawear specialist Lululemon and fashion retailer Ted Baker also report this week.
Central banks
The ECB is set to add another €500bn to its €1.35tn emergency asset purchase programme when it meets on Thursday.
The ECB said in October that it would “recalibrate” all its monetary instruments and recently raised fresh signs that it was gearing up to inject more monetary stimulus into the eurozone’s flagging economy, when its chief economist cited “worrying signals” that financial conditions for banks and small businesses were tightening.
Markets appear confident in the ECB’s power to keep yields at bay but not so much in the bank’s ability to limit the inflation rate below 2 per cent.
Market Questions: Can the European Central Bank keep the surging euro in check?
Elsewhere it’s no change all round, with Chile set to keep its rates on hold on Monday, Canada and Brazil expected to stand pat on Wednesday, and Peru doing the same on Thursday.
Economic data
The UK has gross domestic product and trade data for October on Thursday, that should offer some insight as to how the latest wave of restrictions affected the economy.
Analysts are optimistic Germany and France’s industrial production figures, out on Monday and Thursday respectively, will pick up as manufacturing is less likely to suffer due to lockdowns.
A further rebound is forecast for China with exports and imports data, which are out on Wednesday, set to grow year on year. Consumer demands and domestic activity are expected to drive the surge.
Investors will be watching Japan’s manufacturing and services data for additional Q4 information as well as the Tankan Index this coming Sunday.
The University of Michigan publishes US flash sentiment data on Friday at a time when the country’s mood is split between the steep rise in infections and vaccine hopes.
Source: Economy - ft.com
