An EU official likened the current state of Brexit negotiations to a marathon where runners are “past kilometer 40” of the just over 42-km race. But four weeks before the transition period expires, a no-deal outcome is clearly a risk.

Britain is also about to irk the EU further; on Monday, its parliament will press ahead with draft laws that breach an earlier divorce treaty with the bloc. It also plans new legislation, potentially with more provisions overruling parts of an earlier EU withdrawal agreement.



A big week for the euro area. A two-day EU meeting from Dec. 11 will try to break a stalemate over a 1.8 trillion-euro spending package to aid COVID-hit economies, currently being blocked by Poland and Hungary.

Poland now suggests it may compromise. And the ECB, which has long urged more fiscal stimulus, will be hoping a compromise is reached. It meets on Thursday and is expected to ramp up monetary support for the economy.

Some reckon it may be tempted to hold back some firepower to encourage EU leaders to end their deadlock. But that move carries the risk of a market setback.

The euro at 2-1/2-year highs is another complication for inflation and economic growth. That might well encourage the ECB to do more rather than less.



The clock is ticking on the Dec. 11 deadline for the U.S. Congress to approve an omnibus spending bill to prevent a government shutdown.

But despite potentially nasty implications for the economy, investors have taken past shutdowns in their stride, with the S&P500 edging lower in only two of the past 10 such episodes. And markets remain at record highs.

The raging pandemic gives lawmakers an added incentive to avoid a shutdown that could hurt the nascent economic recovery.

Investors will also keep an eye on stimulus proposals, given as Republicans and Democrats in Congress remain unable to reach agreement on economic relief measures.



Chinese trade figures land on Monday, hard on the heels of bumper Purchasing Managers’ Index readings that showed the economy powering back from the pandemic. Expect more of the same: faster expansion in imports and exports, plus a steady trade surplus.

But as markets begin to pay attention to U.S. President-elect Joe Biden’s policies, the U.S.-China trade balance is worthy of attention. Its size mattered to Donald Trump as a trade-war scorecard, and it may yet count for something for his successor.

Biden has already given the yuan a nudge when he said he didn’t plan to roll back tariffs Trump had slapped on China. Traders have shrugged that off and hoisted the yuan to a 29-month top, but a whiff of misplaced confidence remains.



Brazil’s central bank governor Roberto Campos Neto called the prospective COVID-19 vaccine a “game-changer” for the stricken continent. So while upcoming central bank meetings in three South American countries are unlikely to yield interest rate changes, investors will listen for guidance on the policy outlook.

Traders polled by Reuters predict Chile’s 0.50% interest rate, its lowest in a decade, will be held unchanged on Monday.

Brazilian rates are already at a record 2% low. Brazil’s rate-setting committee maintained at the last meeting a pledge to keep rates lower for longer and may repeat that at its Tuesday-Wednesday meeting.

The easing cycle may be running out of steam in Peru, where central bank officials meet on Thursday. Interest rates have been at historic lows of 0.25% since April.