Squawk Box Europe Express

The U.S. Federal Reserve promises to maintain the pace of its bond-buying programme to support the country’s economy until “substantial” progress is made in the recovery. This, as Chairman Jerome Powell warns of an uncertain half-year outlook. Meanwhile, Congress sees stimulus progress with lawmakers inching towards a $900bn virus rescue package. Markets Stateside see a mixed session with the Nasdaq soaring to a new record high. The U.S. Treasury labels Switzerland a currency manipulator, saying the Swiss National Bank has kept the CHF lower for trade leverage purposes. The SNB has rejected the allegations. British MPs may be recalled from holiday to parliament early next week to discuss and vote on Brexit trade talks as Brussels signals a possible way out of the impasse.  

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There are significant hopes for a U.S. stimulus package after Senate Majority Leader Mitch McConnell said lawmakers are honing in on a rescue deal. Berkshire Hathaway CEO Warren Buffett tells CNBC this agreement by Congress is paramount to save small and medium-sized businesses. The U.S. Federal Reserve is expected to improve economic forecasts during its December meeting but is likely to stop short of expanding the bond-buying programme. In Europe, the ECB has asked banks to limit dividend payouts until September 2021 but eases restrictions on payouts for lenders across the euro zone. And in tech news, China’s biggest chip maker SMIC sees shares plunge after the co-CEO threatens to resign and the stock is removed from the MSCI index over U.S. blacklisting.  

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COVID-19 infection rates continue rising, putting New York City at risk of a full lockdown, while London enters tougher restrictions after being moved into Tier 3. Up to six million doses of Moderna’s vaccine are set to be distributed across the U.S. pending FDA approval while the European Medicines Agency admits hackers have accessed information on the drug. The U.S. Electoral College has confirmed Joe Biden as the next President. The Democrat candidate criticised President Trump’s attempt to overturn the election’s result. In autos news, Volkswagen CEO Herbert Diess has cemented control of the German car giant with the backing of the board but has so far failed to agree a contract extension.  

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The UK and the EU have agreed to "go the extra mile" with Brexit trade talks, sending sterling higher. This, after Commission President Ursula von der Leyen and British Prime Minister Boris Johnson held a phone call on Sunday. The UK will revert to WTO trading rules if a deal isn't struck before December 31, while parliaments on both sides will also need to ratify any deal. Germany will go into a full lockdown over the Christmas period amid a rise in coronavirus deaths and infections. Non-essential shops and schools will close across the country starting on Wednesday. The vaccine rollout is now underway in the US, after the FDA granted an emergency approval for the Pfizer and BioNTech vaccine. The US government plans to deliver up to 3 million doses in the first 24 hours.

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Prepare for a 'no-deal' Brexit - that's the warning from British Prime Minister Boris Johnson as Brussels adopts emergency measures to keep trade flowing if talks collapse. European leaders unlock €1.8 trillion in recovery funds after reaching a deal with Poland and Hungary. Shares in Airbnb double in their debut day of trade, at one point valuing the group at over $100 billion in the biggest U.S. IPO of 2020. Disney bets on its streaming platform, as the entertainment giant announces 10 new Marvel and Star Wars shows during its Investor Day, while raising prices for Disney plus. A group of FDA advisors vote in favour of authorising Pfizer and BioNtech's COVID vaccine for emergency-use, in a move that could see the drug rolled out across America within days.

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The Brexit dinner date fails to break the deadlock, as Britain's Boris Johnson and EU Commission chief Ursula von der Leyen give the two sides until Sunday to reach an agreement, sending sterling lower. European leaders are optimistic they can unlock €1.8 trillion in recovery funds after Germany strikes a deal with Hungary and Poland to overcome their differences on the bloc's budget. The ECB is expected to provide a fresh injection of stimulus, expanding and extending its bond buying plan as Deutsche Bank CEO Christian Sewing tells CNBC low rates are still hurting profitability. British and American regulators look into Pfizer and BioNTech's vaccine after two adverse allergic reactions, while the companies reveal hackers have stolen data on the drug in Europe. Airbnb prices its IPO at $68 a share - above its target range, while DoorDash shares surge over 80% in its debut day of trade, valuing the delivery group at $71 billion.

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UK Prime Minister Boris Johnson heads to Brussels for an evening dinner meeting with EC President Ursula Von Der Leyen in an attempt to break the Brexit deadlock. This, after London scrapped the law-breaking elements of the Internal Market Bill. In the U.S., equities see record highs while treasury yields sink to new lows. JPMorgan CEO Jamie Dimon tells CNBC that he wouldn’t touch treasuries “with a ten-foot pole” right now. And there are reports that Softbank CEO Masayoshi Son is buying back shares in a bid to take the investment titan private.   

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Brexit talks are faltering once more with new demands from Brussels souring the mood in London. At the eleventh hour, France’s President Macron has reportedly intervened over fishing rights and state aid, sparking alarm in Downing Street. Oil prices surge as Opec+ comes to an agreement to relax output cuts in the New Year on an improved demand outlook following second-wave lockdowns. In the U.S., House Speaker Nancy Pelosi and Senate Majority leader Mitch McConnell are once again locked in talks in a bid to push through a bipartisan stimulus bill to release more virus aid and avoid government shutdowns. After the euphoria of the UK’s approval of Pfizer’s Covid vaccine earlier this week, the U.S. drug giant sees its shares fall after supply problems force it to slash its dose target in half.  

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President Trump is set to receive a bill to sign off on delisting certain Chinese companies from U.S. stock markets, following a House vote unanimously supporting the law. German travel firm Tui sees shares dip after receiving its third state bailout following mounting virus-related losses. In London, the FTSE closed sharply higher on improved sentiment around yesterday’s Pfizer/BioNtech vaccine approval as well as the expiry of the UK’s second lockdown. And we hear from U.S. Federal Election Commissioner Ellen Weintraub who says that social media giants Facebook and Twitter could have taken stronger measures to combat misinformation online before last month’s U.S. election.

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Highs on Wall Street, but deadlock in Washington DC. U.S. Senate majority leader Mitch McConnell rejects a bipartisan stimulus plan, while Treasury Secretary nominee Janet Yellen warns that failure to act will cause an “American tragedy”. U.S. AG William Barr has announced the DoJ has found no evidence of voter fraud in last month’s U.S. election. In corporate news, ARM CEO Simon Segars tells CNBC that Nvidia’s $40bn takeover deal is possible despite internal divisions.

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