Good morning,

Sterling has rebounded after the UK rolled back on its hard line on fisheries: They’ve offered the EU a reduction in catch of 35% over five years, having initially said they wanted it to be reduced by 60% over three years. The concession isn’t quite where Europe wanted it to be, but it does potentially break the final stalemate and as such MP’s have been put on notice that they could be back in the Commons next week to vote on a deal. Though we’ve been here before…
Boris has played down the prospects of a deal and reiterated that “WTO terms would be more than satisfactory for the UK.  And we can certainly cope with any difficulties that are thrown our way” , which doesn’t seem entirely accurate, given that he appeared on TV last night urging the public not to panic buy!

The border closure at Calais is hopefully on its way to a resolution after the PM and president Macron agreed plans to safely allow lorries to cross into France.  We’ll get the details on the agreed approach later today, but it’s likely to be testing on approach to Dover and then only being boarded with a negative result.  Currently the backlog on the M20 is north of a thousand lorries and will be continuing to grow. The backlog isn’t just hurting food supply chains:  Toyota has said that it has going to halt its UK production for Christmas two days earlier than planned as their component deliveries have been disrupted – admittedly that doesn’t sound too disastrous, but a quick Google search leads us to think that will lead to almost 2,000 cars not being built in that time!

On the note of car production:  Apple is set to be having a go and will be up and running by 2024. According to a Nasdaq exclusive, the company is also working on its own battery technology, which could radically reduce the cost of producing batteries – which is the most expensive part of an electric vehicle, by far – whilst also increasing the efficiency and therefore the range, which would be very welcome because range anxiety is a very real thing in an electric car with the UK’s pitiful charging network (ex.Tesla)!

Apple’s share price got a bit of a lift yesterday, as did much of the market following it’s initial sell-off. The mood was lifted more by people using the sell-off as a buying opportunity, rather than anything particularly ground breaking on the news front – though one exception was the news from the Fed on Friday evening that US banks will be able to pay dividends and undertake share buybacks in a limited way. This was enough to push most US banks stocks higher, with Goldman Sachs up almost 8% on the day.  Despite the constraints, from January banks will be able to buy back about $11 billion in stock and as such the market wasted no time in making those shares a little more expensive for banks to purchase.

Looking at today: The calendar is once again light and market participants are thin on the ground.  The latter is causing a reduction in trading volumes and as such we are starting to see some more volatile movements, particularly in emerging market currencies – not that we’re considering it an EM currency, but the Pound is behaving the same way!  This will be my last commentary before Christmas, but HCFX are open on all of the non-bank holidays between Christmas and New Year – and given that we’re not going anywhere, if you need us on the other days that’s probably fine too! We look forward to speaking to you and wish you well for the festive season.

Stay Safe


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