The new week began with positive news from Asia. Japan’s GDP reports for the third quarter of 2020 exceeded investors’ expectations, showing that the economy finally grew for the first time in a long while. Japan was struggling even before the coronavirus pandemic, which underscores how exciting the GDP data is. China also pleased investors with robust industrial reports.
Recall that at the moment, Covid-19 is under control in East Asia and countries like China, Japan, and South Korea, which were among the first regions affected by the coronavirus at the beginning of 2020, have been able to recover and avoid a massive second wave of infections so far.
Sadly, the same cannot be said about other regions. The United States has had 11.3 million Covid-19 cases since the pandemic began, and added close to 140,000 more cases yesterday. Experts predict that as many as half a million people could die of Covid-19 in the United States before the pandemic dies down.
Across the Atlantic, France has become Europe’s worst affected country, sitting just under 2 million coronavirus cases, overtaking Russia. Both countries, together with Italy, the United Kingdom, and Poland had more than 20,000 new Covid-19 cases yesterday.
Meanwhile, the UK and the EU chief negotiators are gathering today again for the beginning of what could very well be their last round of negotiations. The two sides already missed three deadlines to reach a trade agreement.
The newest estimate is that if they do not find a compromise within the next seven days, there will be no deal because there will not be enough time to ratify it. The UK and the EU are still in disagreement over fisheries and competition rules, and the EU stated it cannot offer a Canada-style deal to the UK because it is geographically too close to the continent.
As for the economic calendar, it is relatively quiet today, save for this morning’s reports. We expect speeches from several central banks, including the ECB, Federal Reserve, and Bank of England but no major announcements at this point in time.
