Five important keys to consider for next week

1 / STICKY TALKS

Britain and the European Union are said to be on the verge of closing a post-Brexit trade deal that would regulate their relationship after the transition period ends on January 1, 2021, six weeks apart.

Diplomats say there are three sticking points left and EU leaders are stressing the need to prepare for no-treatment. Brexit deadlines have come and gone several times in the past, but negotiators are giving a final push and the consensus is that London and Brussels will reach some sort of agreement – possibly a minimum agreement with details to be decided in the future. .

Recent gains in British pound and UK stocks imply assets have spiked on hopes of a COVID-19 vaccine and a Brexit deal. They could be on a difficult path.

2 / PURCHASE SIGNS

In a typical year, American shoppers prepare for “Black Friday,” the kickoff event to the holiday season. But this is 2020. The rise in coronavirus cases makes family scenes of consumers crowding into stores for bargains unlikely.

Oxford Economics expects holiday sales to rise just 0.6% from a year ago due to the confluence of COVID-19, earned income and a weak job market. Macy’s is expecting a tough time with a possible 20% decline in sales during the downturn.

Retailers aren’t so pessimistic: Walmart is forecasting a promising holiday season. Upcoming earnings from Nordstrom, Gap and Dollar Tree will offer more pointers.

The Solactive-ProShares Bricks and Mortar Retail Store Index slightly outperformed the S & P500 this year, but that pales against a 70% jump from Amazon, the home economy winner.

3 / PMI PESIMISMO

Flash readings of November business activity from Europe and the United States on Monday will reveal how severe the damage was caused by the resurgence of the coronavirus and the restrictions imposed to contain it.

Having bounced off the initial COVID-19 slump, global PMIs are again tottering around 50 – the barrier between expansion and contraction.

The blow this time should not be so severe, with less severe restrictions and better prepared companies. But when the market reaction to the latest, weaker-than-expected US data is taken into account, investors may err on the side of caution until a vaccine is rolled out, fiscal stimulus in Europe and the United States are confirmed, and investments take hold. signs of recovery.

4/ WON WATCH

South Koreans are looking for a stronger currency. No one expects the Bank of Korea to do much about low interest rates when it meets on Thursday.

Instead, all eyes are on the currency markets, where the central bank is believed to be selling the won to prevent it from reaching 1,100 to the dollar – a line that can bring pain to an economy that relies on exports of money technology.

Other countries face a similar dilemma. Asia’s rapid recovery from the pandemic and higher yields, coupled with a slower pace of investments and imports, create a tailwind in the balance of payments for foreign exchange.

Authorities in Thailand and China are also actively massaging the gains in the baht and yuan. Indonesia and the Philippines have seized the opportunity to make surprise interest rate cuts this month.

5 / A LITTLE MORE?

Bitcoin has soared more than 150% this year, to the point of hitting the 2017 all-time highs of around $ 20,000. Many expect the rally to end in tears, as it did three years ago when Bitcoin crashed 50% in a month.

Others differ: Calling it the new gold, Citi analyst Tom Fitzpatrick predicted that bitcoin would skyrocket to more than $ 300,000 in 12 to 24 months. Bitcoin fans cite better market infrastructure, greater presence from major investors, and better liquidity to explain why they think this rally is leggy.

While central banks are in money printing mode, the supply of Bitcoin is limited. But it remains a volatile market, dominated by retail, with spotty regulation and frequent attacks. For now, the bulls appear in command. -Bitcoin is the new gold. Inflation Hedging, Risky Bet: What’s Behind Bitcoin’s 2020 Recovery?

(Reported by Lewis Krauskopf in New York, Dhara Ranasinghe, Tommy Wilkes, Tom Wilson in London and Vidya Ranganathan in Singapore. Compiled by Sujata Rao, edited by Karin Strohecker, Larry King) Reuters. Translate serenitymarkets.com

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