Brexit talks at last are able to bring some good news, merely because the two sides have decided to get back round the negotiating table. Boris Johnson had walked away from talks citing a lack of progress and a fundamental change in approach needed by the EU. At least being back round the table there is a chance of a deal going through.
The Pound surged on Wednesday following the latest developments, this morning GBPUSD is holding those gains comfortably above $1.31 on the expectation that at least a route towards some form of deal exists.
Covid cases in the UK and across Europe continue to surge. More areas of the UK are moving into the strictest Tier 3 lockdown, in a move to stem the spread of the virus but will also derail the fragile economic recovery of those areas and potentially the UK as a whole. The tighter restrictions come as the FCA warns that around 12 million Britain’s are likely to struggle with bills and in repayments as the covid pandemic continues.
Deteriorating German consumer confidence is adding to the down beat mood in Europe. Consumer morale for November declined -3.1 worse than a downwardly revised -1.7 in October and the -2.8 expected. The worsening outlook in Europe’s largest economy comes as the number of covid cases in Germany hits a record high and as a report indicates that half of Europe’s small businesses risk bankruptcy within a year. Whilst the EUR is holding its ground the DAX is leading the charge southwards.
Looking ahead the UK & Eurozone economic calendar is sparse. Attention will shift to the US jobless claims, which are expected to show only a very slight improvement from last week’s unexpected surge.
Later President Trump and Joe Biden will battle it out in another live debate.