Another Brexit deadline
Today’s news headlines:
‘Sunday deadline set for ‘firm decision’ on Brexit talks’. Brexit negotiations took a turn for the worse last night after three hours of ‘frank’ talks in Brussels ended without a resolution on the remaining issues. Boris Johnson’s dinner with President of the European Commission, Ursula von der Leyen, resulted in a Sunday deadline being set for a ‘firm decision’ on the future relationship between the UK and EU post-January 1st. Officials noted that ‘very large gaps remain between the two sides’ and that there had not been ‘much of a glimmer of progress’ during talks. Negotiators from both sides, including Michel Barnier and David Frost, will reconvene today to try and resolve the essential issues before the weekend. (Financial Times)
‘UK recovery slowed before November lockdown’. The UK’s economy showed signs of slowing even before November’s lockdown, as output fell from 1.1% in September down to 0.4% in October. Large falls in the hospitality sector led to the reduction in growth, which leaves the economy 8.2% smaller than in October 2019 and 7.9% smaller than in February 2020, just before the pandemic struck. The OBR does not expect the UK’s economy to reach pre-virus levels until the end of 2022 and economists at Pantheon Macroeconomics predict the economy to shrink by 5% in November. (Financial Times)
Today's events, rates, and data
- The Pound slipped against its major trading partners last night following unsuccessful Brexit talks, with a measure of one-week volatility against the US Dollar having risen almost 85% since the end of November. Elsewhere, Asian stocks slipped overnight after prospects for fresh US fiscal stimulus dimmed. This morning, US and European equity futures trade flat, as markets eye fresh stimulus from the ECB’s monetary policy meeting later.
UK Industrial Production: 1.3% vs 0.5% previously
UK Manufacturing Production: 1.7% vs 0.2% previously
EU Economic Summit: Day 1
ECB Main Refinancing Rate: 12.45pm
ECB Monetary Policy Statement: 12.45pm
ECB Press Conference: 1.30pm
US CPI & Core CPI: 1.30pm
US Weekly Jobless Claims: 1.30pm
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