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V for vaccine: A 90-year-old Briton became the first person to be inoculated against Covid-19 this morning as the UK begins its mass vaccination programme. The name Margaret Keenan will hopefully be remembered for symbolizing a momentous turning point in the fight against the virus.

Pfizer and BioNTech have had trouble with the supply chain but the UK should have 4m – enough for 2m people – by the end of the year. The second person vaccinated is a certain William Shakespeare from Warwickshire…a good omen? Health Matt Hancock says the Oxford University vaccine will get approval within a couple of weeks and that once the most vulnerable have been vaccinated the government will begin to lift restrictions. Truly light at the end of the tunnel.

Brrrrrr is for Boris’s Brexit: the saga drags on. UK prime minister Boris Johnson will fly to Brussels this week for a tete-a-tete with Ursula von der Leyen to try to break the impasse. The problem seems to be that there is simply no zone of compromise in the three remaining areas – fishing, level playing field and governance. So with neither side seeing a way to accommodate the other, they are both relying on the time element to do the work for them. This is risky as both sides have said no-deal is better than a bad deal. We know neither wants to compromise on key areas of sovereignty. Nevertheless, a last-minute effort should still lead to some form of agreement, even if it is a slimmer, incomplete package.

Sterling dipped sharply yesterday morning on some negative headlines but faded this move easily and this morning GBPUSD is holding steady above 1.33.

European stock markets traded a little lower in the early part of the session with Brexit risks perhaps weighing on sentiment and mixed session in Asia overnight. US lawmakers are set to pass a funding bill to avert a government shutdown, whilst market attention remains on whether a stimulus package can also be agreed before Christmas and the end of federal support on Dec 26th. Last week’s soft payrolls number ought to add to the sense of urgency.

US markets traded mixed on Monday, with the Nasdaq rising and the S&P 500 and Dow a bit weaker. Uber says it will end its driverless car ambitions, whilst Tesla shares rallied another 7% ahead of the stock’s inclusion in the S&P 500 later this month. The market cap now exceeds $600bn, which will make it among the largest stocks on the index. Shorts have been well and truly toasted and seem to be throwing in the towel – Jupiter Absolute Return fund manager James Clunie is stepping down after suffering a very bad run from his short Tesla position.

Lockdown in England in November saw a UK retail sales growth hit. Following from a string of upbeat numbers for retail, last month saw sales rise by just 0.9% from last year, a marked slowdown from the 4.9% year-on-year growth in October. Retailers will hope that the December lifting of restrictions and a Christmas to be largely spent at home and not on the slopes will deliver a lift.

With little to do, restaurants shut, and Christmas parties cancelled, grocery sales are resilient – Kantar reports 11.3% year-on-year growth in the 12 weeks to Nov 29th, and 13.9% growth last month alone. November turned out to be the biggest month ever for UK supermarkets. In the 12 weeks to the end of last month, Tesco sales rose 10.4%, Sainsbury’s +10.8%, WM Morrison +13.7% and Asda +7.7%, with the sector seeing inflation of 1.4% over the month.

On the earnings front, Ashtead shares shot to the top of the FTSE 100 after the company said it now expects full-year results to beat previous expectations. Enjoying essential business status in key markets helped it remain open over the second quarter, supplying equipment to various key service providers. In the first half, revenues fell 3%, with rental revenues down 4% on a constant currency basis. Operating profit declined to £641m from £771m last year but overall, the second quarter, covering the period to the end of October, was a lot better than the May to July period. In Q2, the decline in rental revenues slowed to just –1%. Pre-tax profits declined -21% in the first half, but Q2 showed a marked improvement from Q1 as profits only fell by –7%. A much more resilient period in the second quarter has allowed management to lift full-year expectations for free cash flow to exceed £1.2bn from previous guidance of £1bn. Rental revenue growth in both the UK and Canada is now seen at 15-20% this year, up from flat previously. At a group level, full year rental revenues are seem between –3% and –7% from previous guidance of –5% to –9%.

Yields pulled back, with the 10-year Treasury down to 0.93 having threatened to break 1% on Friday. Real rates moved further into negative territory, helping to push gold higher. Spot gold rose through the 21-day moving average on the upside as prices cleared the 38.2% retracement of the Mar-Aug rally.

Spot gold has risen through the 21-day average.

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