In a quiet week on the economic data front, markets instead focused on potential policy developments in the U.S. Fiscal stimulus hopes rose and fell throughout the week as negotiations continued between Democrats and Republicans. Fed Chair Powell reiterated the importance of additional fiscal stimulus and there appears to be a genuine willingness on both sides of the House to get a deal done. However, with election campaigning ongoing and Senate hearings for the Supreme Court position to begin, the outlook is less than certain.

U.S. lawmakers also published a report into competition and potential market manipulation in the Tech sector. The report outlined a number of criticisms of Amazon, Apple, Facebook, and Google, and brought renewed speculation that a partial break up of some of these names might be on the horizon. However, such talk is still speculation at this time.

U.S. bond yields (which move inversely to price) did rise on the potential stimulus news and also the expectation of increased spending under a Biden presidency. The 10 year Treasury yield hit a four month high, but remains sharply lower than it was pre-pandemic. As mentioned, economic data was thin on the ground last week, but there were positive readings from a number of PMI releases, including Services data in the U.S.

Brexit negotiations continued over the weekend with Boris Johnson holding separate calls with Emmanuel Macron and Angela Merkel. A deal appears to be moving closer as progress has been made on the key sticking points of fishing and state aid, with more reconciliatory tones in respect to Northern Ireland also helping. CLICK HERE