Market news | 15 December, 2020

Weekly Keys: What is happening this week?

Daniel Luengo Advisory Department

The arrival of the first vaccines puts a stop to the fear of a third wave of contagion after Christmas and keeps the US stock market at a high.

Last week’s events

Europe
The date of UK’s exit from the EU is still approaching and we continue without agreement. Everything points to the fact that several negotiators are going to be left without Christmas holidays because they have not done their homework beforehand. On the macroeconomic side we highlight the ECB meeting which resulted in a new round of asset purchases worth 500 billion until March 2022. In total, owing to the situation caused by the coronavirus, the European central bank is going to put almost 2 trillion Americans (2 trillion Europeans) on the table in these debt programmes. Despite the first movements of the euro, the decision did not in the end lead to a very sharp depreciation as might be expected from such a decision.

USA
The week was quieter in the US where only the IPC and the IPP were worth mentioning. In the case of the first index, it repeated the same 0.2% rise that we saw in October and which was a tenth more than expected. This situation is totally contrary to the PPI, which only grew by 0.1% in November, disappointing the market.

The week ahead

Europe
PMI release week in both Germany and the UK, although there is every reason to suspect that possible movements, both in markets and in currencies, will be more conditioned by the development of the post-Brexit trade agreement negotiations than by actual data on these indicators. The meetings of the central banks of Switzerland and the United Kingdom, as well as the ifo index of the German business climate and the definitive data on inflation in the euro zone, will also be closely monitored.

USA
FED meeting on Wednesday and we shall see what action it takes after the new liquidity injection we have already seen in Europe. We will also keep an eye on the retail sales release, and the Philadelphia FED manufacturing index.