US

US equity markets continue to edge higher over the week, largely on the back of vaccine optimism and anticipation of economic recovery, despite disappointing recent economic figures. Over the past 5 days ending Thursday, all 3 major equity indexes gained 1.01-2.89%. The Moderna COVID vaccine is given the green light by the FDA advisory panel, hopefully following footsteps of the BioNTech-Pfizer vaccine in getting nationwide approval for deployment, which should provide a stronger case for an earlier recovery. On the monetary front, the Fed made no changes to the existing monetary policies, Fed chairman Jerome Powell mentioned that the Fed expects a faster than expected growth in 2021, and a lower unemployment rate. Economic figures on the other hand remain disappointing, retails sales went negative MoM ahead of the holiday season, initial jobless claims climbed higher, and the Philadelphia Fed Manufacturing Index in December turned out to be far lower than the market consensus. However, markets and businesses remain hopeful on the vaccine induced recovery, as indicated by the higher manufacturing and services PMI. Next week, we will see a shorter trading week due to Christmas, but GDP figures for Q3, Michigan consumer sentiment and core durable goods orders can shed light on status on the economy.

Europe

Vaccine news continue to contribute to the positive market sentiment, the UK, French, and German stock markets continued to edge up over the past 5 days ending Thursday, logging in gains of 0.07-4.22%. Epidemic news continue to take the centre stage, with French president Emmanuel Macron tested positive for COVID, forcing quarantines for numerous European politicians. Epidemic remains serious in Europe, and the German government has already announced a stricter lockdown that stretches over New Year, which is expected to dampen business sentiment in the traditional high season. As for Brexit matters, trade talk deadlines have extended until the end of the year, but UK Prime Minister Boris Johnson noted that there is a high possibility for a no deal Brexit by the end of the year. For economic indicators, Eurozone had good numbers, with various PMIs exceeding market expectations. Next week, the Eurozone will publish more figures on business sentiment and consumer confidence.

China

China A-shares improved, with the CSI 300 Index rising 2.26% for the week, while Hong Kong stocks did not see much movement over the same period. Industrial production rose at a slightly faster pace to 7% YoY in November, while retail sales rose 5% YoY over the same period, up from 4.3% in the previous month, and fixed investment rose 2.6% YoY over the same period, up from 1.8% YoY last month. The market will focus on the key policies mentioned at the Central Economic Work Conference.