Good Morning,

Today is a very welcome good news day: Nasdaq are reporting that the UK negotiating team has shifted its position on fisheries in a bid to break the Brexit deadlock. Sources from the EU side of the table say that the UK has put across two ideas on fishing rights that are a departure from our previous positions. One proposal is reported to be a gradual increase to UK fishing quotas over time, rather than a large jump in allowances on the 1st January. The second is a watering down of UK territorial water claims around the Channel Islands, which would give EU vessels freer access in these areas. None of this is by any means a done deal, but the mere hint of a break in the stalemate is news that we’ll take.

Onwards, to the internal market bill, which Rishi Sunak has called an “insurance policy” in the negotiations and a good idea. The PM may have to acquiesce to rebel MPs by inserting a clause into the bill that wouldn’t allow ministers to go ahead and break international law unless their was parliamentary approval to do so. Boris is fearing a much harder time of it next week when the bill comes up for its final commons vote and is in discussions over whether such an inclusion would get it through. It’s another piece of news that isn’t a done deal, but looks to be heading in a less alarming direction.

Rishi Sunak has hinted that there will be more support to come to prevent UK Job losses, telling MPs “Throughout this crisis I have not hesitated to act in creative and effective ways to support jobs and employment and will continue to do so”. It’s unlikely that he would just go for an extension of the furlough scheme as is, because this doesn’t solve longer term issues with jobs that aren’t viable in the long term and it also does nothing so support young people that would normally be coming into the workforce. The FT suggests that as we are an economy so reliant on consumer confidence, Mr Sunak’s next steps will be new schemes like Eat Out to Help Out that encourage consumption and are self-perpetuating. Today is the last notice day of the furlough scheme for employers.

Across the Pond: Trump has said of a vaccine “we’re within weeks of getting it. You know, could be three, four weeks”. This is at odds with what the experts advising him say and also against what the drug companies are saying, but Trump is pressing hard to get something out there ahead of the election. Pharma companies have said that they won’t be pressured into anything and until safety and efficacy are proven then no drug will be rolled out. Dr. Anthony Faucci’s timeline is that the vaccine should be developed by the end of the year and rolled out in 2021.

Trump will review the recommendation of the commerce department over Tik Tok later today. It looks like Byte Dance will have to set up a new US company and Oracle will be a minority shareholder, as well as host all of the data. The market will be watching the outcome of this quite closely as it doesn’t just speak to TikTok having a future in America, but a recurring theme of Trump’s backing down on his tough rhetoric on China at the last minute – which is a encouraging sign for markets, because it means his bark is worse than his bite.

The World Trade Organisation has ruled that the tariffs imposed on Chinese goods by the US are illegal. A panel of judges ruled that it couldn’t be proven that the tariffs on $400bn of goods weren’t necessary to level the playing field on trade and as such violated international regulations. Their ruling isn’t legally binding, but will serve to damage relations between the US and the WTO even further. The Hill has the story.

Canada is said to be standing down from their threats to apply retaliatory tariffs on US aluminium products. Their threats came as the US was planning to impose levies on aluminium being imported to the US from north of the border, but those have since been dropped as the US thinks that the amount of the product being imported is likely to fall after an initial surge earlier this year. As such Canada is likely to roll back later today.

Today’s data has already started, with UK inflation for August printing at a record low of 0.2%. The Eat Out to Help Out scheme is partly responsible for the fall as it pushed down restaurant prices over the period, as were air fares which fell in the month of august for the first time ever. Inflation is well away from the 2% target, which is probably a small mercy in the short term.

Later on today we get US retail sales numbers and also the Federal Reserve rate decision and subsequent press conference. We don’t expect the Fed to be making any departures from ultra-accommodative policies, so the only real market mover would be if they adjust their timings on when they see things getting back to normal and the market reassess how long this zero interest world is set to hang around for.

With all of the events ahead of us, we produced this timeline of some of the key items that we’re looking forward to between now and the end of the year. Hope you find it useful.

Have a great day


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