EU chief negotiator Barnier is set to update EU leaders regarding post-Brexit trade negotiations. Key issues such as fisheries, competition and state aid remain unresolved although progress has been made on other legal texts. This has led the market to expect both sides to advise a Brexit trade deal is possible and to recommend initiating the next round of trade talks this weekend. The Pound has weakened due to a lack of substantial progress on this front.
France has reported its highest number of daily coronavirus related deaths since mid-April at 854. Both Hungary and the Netherlands have announced new measures in order to curb increasing virus cases. However, factories in Italy and Spain have seen an increase in output with manufacturing activity continuing to increase despite increasing virus cases. The market has shifted its focus away from the Euro and towards the Pound and Dollar due to Brexit trade talks and the US presidential election.
The market remains cautious as the results of the US presidential election suggest that there is a tighter contest than anticipated in the battleground states although vote counting is still ongoing. This has led to the Dollar experiencing extreme volatility but has ultimately strengthened with Trump doing better than expected and due to its safe-haven status as the prospect of a contested election has increased. President Trump has claimed that the election had been a fraud on the public and has vowed to fight the election results in the Supreme Court. Both Trump and Biden have claimed to be on track to win the election.