Equity markets were subdued this week as positive incoming vaccine news was offset against ever-growing economic restrictions in the U.S. and Europe, aimed at curbing the recent spike in virus cases. On the vaccine front, the world received more positive news, following on from Pfizer and BioNTech’s announcement last week, with Moderna stating that its Covid-19 vaccine candidate is 94.5 percent effective. Both vaccines are based on introducing genetic material, mRNA, into the human body in order to produce spike proteins which prevents the coronavirus from entering human cells.

Meanwhile, The University of Oxford confirmed that the Covid-19 vaccine it is developing with AstraZeneca Plc, produced strong immune responses in older adults, with pivotal findings from the final phase of trials expected in the coming weeks. In less positive news, the U.S. crossed a grim milestone with fatalities attributed to Covid-19 crossing 250,000.

U.S. economic data releases during the week were mostly soft. Weekly jobless claims rose for the first time in over a month, from 711,000 to 742,000. Retail sales excluding autos in October also missed expectations and grew at the slowest pace (0.2%) since April, whilst industrial production rose a bit more than expected in October, but regional manufacturing gauges indicated slowing expansion.

Whilst President Trump continues to refuse to concede the recent election, his efforts were dealt another blow with President-elect Biden’s victory in Georgia confirmed by a recount. The Democrats beat the Republicans in Georgia by 12,284 votes, according to the audit required by state law.

In Europe, Hungary and Poland blocked the EU planned EUR 1.8 trillion fiscal package. Both countries opposed a mechanism that would allow the EU to block disbursements to countries violating its rule of law principles. German Chancellor Angela Merkel said she would hold talks with the leaders of the two countries while defending the existing proposal.

Brexit trade deal negotiations are down to the wire and expected to continue through the weekend and possibly into next week. If both sides don’t sign a trade deal, Britain will default to trading with the EU on WTO terms. France, the Netherlands, and Belgium urged the EU to start implementing contingency measures in case there is no deal before the Brexit transition ends on December 31.

Japan’s economy grew by 21.4% (annualised) in the third quarter, ahead of consensus estimates for a 18.9% increase. Prime Minister Suga and the International Olympic Committee also agreed that the Tokyo Olympics should be held despite the latest surge in the pandemic. The Olympic games are scheduled to be held from July 23 to August 8, 2021.

U.S. markets ended the week mostly negative, with the Dow Jones Industrial Average (-0.73%) and S&P 500 (-0.77%) both in the red compared to a mildly positive Nasdaq (+0.22%). This compares to European and Asian markets which both managed to finish the week in positive territory. In Europe, FTSE 100 Index (+0.56%) and Euro Stoxx 50 (+1.04%) were stronger along with the Nikkei (+0.56%) and China’s Shanghai Composite Index (+2.04%).