The European Union will be in focus today due to several events going on there.
First of all, the European Central Bank is having its last monetary policy meeting for 2020. Though the ECB previously signalled that it would loosen its policy further, the interest rate will most certainly remain the same. Instead, the ECB will try to support the economy through its many asset purchasing programs, so that’s where investors’ eyes will be. One of the programs was launched specifically because of the pandemic - the PEPP, and that one is expected to carry the bulk of the stimulus.
In addition, there is a European Council meeting beginning today. Everyone seems to be most curious about Brexit this week, most specifically whether the EU will manage to agree on a trade deal with the United Kingdom. However, that issue is not officially on the agenda for the summit. The deadline for the negotiations has been pushed to Sunday.
Other events on the economic calendar today included the publication of the latest GDP reports from the United Kingdom, which were better than expected. There was also an uptick in industrial production in the UK, but the trade balance report was a bit disappointing.
Later in the day the United States will publish its inflation rate reports for November. In addition, it is also time for the weekly jobless claims data. There is speculation that more jobs have been lost this week due to the ongoing Covid-19 outbreak in the US, which officially entered its deadliest week.
The stock markets today are somewhat pessimistic, or neutral at best. There is little clarity over the future of the recently-revived stimulus plans in the United States as Democrats and Republicans continue to bicker over the amount of the funds.
Meanwhile, the world is set to hit 70 million coronavirus infections by the end of the week. The United States is home to over 15.8 million of those, with more than 296,000 deaths. Yesterday the US confirmed 226,000 new cases, its second highest all-time, as well as its highest daily deaths. Hospitalizations are also at an all-time maximum. The FDA is going to decide whether to give the Pfizer vaccine emergency authorization today.
Countries within the EU appear to be doing better, with cases gradually decreasing. A notable exception is Germany, which has been unable to bring its daily numbers consistently below 20,000 despite the lockdown. Brazil, India, and Russia are also still highly affected by the virus.
