This will be an abbreviated Week Ahead this week. Markets are moving on from the election and focused on data releases and news on vaccines and treatments for COVID-19. Another issue that looms large, however, is that the negotiation of the trade deal between the U.K. and European Union (EU) was supposed to be decided by now.
With a year-end deadline looming, there is an understanding that a deal would need to be reached by Thursday ahead of an EU leader videoconference in order to get approved by the European Parliament next week. There is another EU meeting on Dec. 10–11, and if there is no deal by that time, then expect preparations to start for a really messy end of the year.
The remaining issues deal with a level playing field, access to British fishing waters and how the deal will be enforced. With the apparent election of Joe Biden to the U.S. presidency, British Prime Minister Boris Johnson is seen as having to get a deal somehow, since conventional market thinking is that a Biden presidency will not produce a trade agreement with the U.S. anytime soon.
In addition, a couple of high-level resignations from Prime Minister Johnson’s inner circle have thrown the British government into a bit of a last-minute panic. We’ll be watching and discussing this all week, as yet another 2020 event injects a little more anxiety into the world economy.
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