Here we go again…Looks like the scallops and the chocolate waffle dessert wasn’t enough last night as Brexit talks carry on until Sunday! European indices were all trading pretty steady all morning up until the ECB announcement. They ticked lower since then and slipped further as the press conference started. Key levels our charts team are watching remain 13460 resistance on the DAX (13238 last) and 20 on VIX (that’s its support but resistance for “sentiment”). Volumes all mixed but overall 17% lower vs the last 30 days.

Quite a slow morning today with lacklustre volumes across the board (down -44% vs last 30 days). I could have probably copied and pasted the trading call from yesterday, as you can tell, not much has changed dramatically. Brexit – zero progress overnight. We are starting to see some headlines coming through but all we need is the official statement really. Only exciting news today is the rollout of the Pfizer/BioNTech Covid vaccine here in the UK. Hooray! First jab took place early this morning and is set to be next distributed to those aged 80+ and care home workers.

A bit of a waiting game today as we all await any official update/statement on Brexit talks. Clearly there wasn’t much progress made during the weekend and headlines today have been all quite bearish. Our economist (Clemmie Elwes) thinks the most likely outcome of the von der Leyen-Johnson call will be “negotiations to continue” but we should see…at this point, we don’t expect talks to go significantly either way.

For what I would say was a pretty passive week (SXXP set to finish the week down -0.1%, vols down -13% vs 20d AVAT), at least we have everything coming up together now. Main catalyst clearly Brexit and despite a step backwards overnight, up until now, 2/3 headlines have been positive. Apparently a deal is expected by the end of the weekend so fingers crossed for that – next week could be fun if that materialises. Sterling a little bit confused about it all, GBP/EUR jumped +0.4% to celebrate the headlines but retracted doing so pretty quickly. Same for equities with the SXXP having a similar move (up +0.3, then down -0.3%). FTSE 100 actually had a rather muted reaction although it is finally trading above 6511 (6526 last). Keep an eye on it, next target at 7000.

We need some more kindling to keep this fire going.

With markets buffeting against recent highs, the vaccine factor’s ability to stoke bullish sentiment is having a diminishing effect. Europe is having a second day of chopping trading on lower volumes, as investors wait for the next catalyst. Progress on the US stimulus bill, or a breakthrough in the (seemingly perpetual) Brexit talks, should see markets leg higher, though for how long remains a mystery. For now, as markets trundle sideways in a state of short-term purgatory, the overall sense is that investors are taking risk off the table after the aggressive moves higher in November, which is reflected well by our pad today that has a 2-to-1 sell skew.

Have you started planning your summer holiday for next year?

Leaving Brexit aside for a moment (which I’m sure we are all fed up with at this point), we received good news this morning as the UK approved Pfizer/BioNTech vaccine. God knows how the allocation process will be but for now, at least 40m doses are set to arrive in stages (enough for c.20m people, around 30% of UK population). Markets clearly already celebrated enough vaccine news in November but feels like a major achievement for sure.

The countdown has officially started! We have 25 days left for Christmas and I’m not sure about you but I can’t wait to open my advent calendar this evening. I usually eat two in a row when I can’t hold myself but I will try my best this year.

We started the month on a positive tone with all EU indices and most sectors in the green. Looks like equities are ready to hold onto November’s gains so fingers crossed for a strong end of 2020. History tells us that December is one of the best months of the year for most equity indices so let’s see how the month evolves (see  chart below). Volumes actually not too bad today (+20% vs yesterday) – Banks probably the highlight with SX7P vols up +15% vs the last 30 days. The sector is currently the second best performer (up +2%) while Healthcare is not getting much love from investors (down -0.3%). Oils also amongst the winners (although currently ignoring OPEC’s news). Today’s meeting was delayed until Thursday so ministers could have more time to come up to an agreement, sector up +1.6%.

QUOTE OF THE DAY “None of us, I suspect, enjoys navigating the crowds, and none would relish that when social distancing is so important to controlling the virus.” Housing Secretary (Robert Jenrick) as shops in England will be allowed to open 24/7 during the Christmas period KEY INDEX MOVES   Stoxx50 FTSE DAX IBEX ▲ […]

Have you done your Black Friday shopping? With some investors recovering from their thanksgiving dinner overnight, today has been another slow trading day. The morning was a bit more active but volumes have been drying up as the session progresses. The IBEX is pretty much the only index seeing decent vols although most driven by the Sabadell-BBVA news (SAB SM vols up +200% vs 30d AVAT). Growth and Value similar to the last couple of days with Growth outperforming but not by much this time (STGP +0.3% vs STVP +0.1%).

Happy Thanksgiving all! A bit of a pause for breath today with lower volumes across the board (down -30% vs the last 30 days). European indices are all trading between -0.5%/+0.1% but still nicely above their respective key levels. Spain the main highlight for us this week. The IBEX made a new 8m high yesterday and despite underperforming today, it’s been above 8000 (key support) pretty much all week (8114 last). Sectors similar vs yesterday with defensives outperforming cyclicals for the second day in a row. Growth outperforming Value again today (STGP +0.4%, STVP -0.7%).