There are key deadlines on both sides of the pond as the year 2020 quickly draws to a close. The Brexit talks continue as the EU and UK race to hammer out an agreement ahead of the December 31st deadline. In the US, lawmakers are trying to bridge the gaps and approve a massive stimulus bill that would also provide funding to stave off a government shutdown. On the fundamental front, it’s a quiet week, with the focus on GDP reports in the US, the UK and Canada.

German and eurozone Manufacturing PMIs improved in November and remain well into expansionary territory, with readings in the mid-50s range. The services sector remains in contraction, as the German and eurozone PMIs came in around the 47 line. Eurozone inflation remains at very low levels. Headline CPI fell by 0.3% in October, marking a fourth straight decline. Core CPI recorded a gain of 0.2%.

The markets were glued to the Brexit talks last week. The talks continued as a Sunday deadline came and went, which boosted the pound. However, the rally fizzled on Friday, an agreement remained elusive. UK Employment numbers were a mix. Wage growth rose to 2.7%, up strongly from 1.3% beforehand. Unemployment claims jumped 64,300, which was much higher than the forecast of 10,500. As well, the unemployment rate edged up to 4.9%, up from 4.8% There were no surprises from the BoE, which made no changes to the Official Bank Rate of 0.10% or to QE. The bank was expected to remain on the sidelines while trade talks continue between the UK and the European Union

Canada’s ADP Non-Farm Employment Change showed a small gain of 40,800 in November, marking the first gain since July.

US PMIs remained well into expansionary territory, with Manufacturing PMI coming in at 56.5 and Services PMI at 55.3. However, the Philly Fed Manufacturing Index slowed to 11.1, down from 26.3 beforehand. The Federal Reserve maintained its asset purchase program at the current level of $80 billion/mth. In addition, the Fed provided additional guidance which can be viewed as a dovish signal. Unemployment claims were up sharply for a second straight week, rising to 885,000.

1. UK Final GDP: Tuesday, 7:00. Second-estimate GDP for Q3 is expected to record a strong gain of 15.0%, confirming the initial result. This comes after a sharp decline in Q2 of 19.8%.
2. Canada GDP: Wednesday, 13:30. Canada releases GDP on a monthly, rather than quarterly basis. Economic growth has been slipping, and GDP slowed in October to 0.8%, down from 1.2% beforehand. We now await the November data.
3. US GDP: Tuesday, 13:30. It’s a quiet week in the US, and the third-estimate GDP report isn’t likely to shake up the markets. The forecast of 33.1% is expected to confirm the prior two estimates.