![\"Europe](\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/01\/001_ETFs-1100x619.jpg\")
<\/figure>\n\n\n\nChris Williamson, chief business economist at IHS Markit recently said that the eurozone\u2019s economy is \u201cfaring better than expected in December,\u201d with the flash composite Purchasing Managers\u2019 Index (PMI) coming in at 49.8, ahead of consensus expectations of 45.8. He observed that the latest PMI data \u201chint at the economy close to stabilizing after having plunged back into a severe decline in November,\u201d amid renewed Covid-19 lockdown measures.<\/p>\n\n\n\n Williamson added that companies have \u201calso become increasingly optimistic about the year ahead, with vaccine rollouts expected to help restore businesses to more normal trading conditions as 2021 progresses.\u201d<\/p>\n\n\n\n However, while Germany\u2019s manufacturing industry and booming export activity appear to be driving eurozone growth, European service sector companies operating in the ongoing pandemic-stricken environment continue to face daunting near-term hurdles, as social distancing measures remain highly restrictive to revenue generation. These challenges are likely to continue into 2021, despite the vaccine rollouts.<\/p>\n\n\n\n Meanwhile, government-led stimulus measures have generally supported economic sentiment in the region.<\/p>\n\n\n\n In the International Monetary Fund\u2019s World Economic Outlook for October 2020, the institution noted that the \u201cbleak numbers that mark the Covid-19 recession would have constituted far worse signposts had massive policy support not thwarted further slides in activity,\u201d while \u201cthe novelty of the policy actions has also supported sentiment.\u201d<\/p>\n\n\n\n The European Union\u2019s \u20ac750 billion pandemic recovery package\u2013fund, for example, along with support from the European Central Bank, have largely contributed to the resurgence of riskier asset performance in the second half of 2020.<\/p>\n\n\n\n The IMF noted that equity markets in advanced economies have mostly regained, and in some cases exceeded, their levels from the start of the year, sovereign bond yields are \u201cbroadly unchanged\u201d or have declined further since June, \u201cas seen in Italy since the European Union\u2019s pandemic recovery package was established and the European Central Bank\u2019s pandemic emergency purchase program was expanded,\u201d and corporate spreads have dropped further, \u201cparticularly for high-yield credit.\u201d<\/p>\n\n\n\n Year-to-date in 2020, credit default swap (CDS) spreads on Italy\u2019s 5-year sovereign bonds have closed-in by more than 24 basis points to just under 100 bps. The country was also among those euro area and EU nations that recorded the sharpest increases in GDP in the third quarter of 2020, with a 15.9% increase \u2013 third behind Spain (+16.7%) and France (+18.7).<\/p>\n\n\n\n Against this backdrop, the European Commission released details of the EU-UK Trade and Cooperation Agreement, as the UK gets set to exit from the EU Single Market and Customs Union, as well as all EU policies and international agreements on January 1, 2021.<\/p>\n\n\n\n Among the \u201cinevitable\u201d changes from Brexit, the EC highlighted that the UK\u2019s departure will \u201cput an end to the free movement of persons, goods, services and capital with the EU.\u201d<\/p>\n\n\n\n The EC put forth examples of these changes as:<\/p>\n\n\n\n The free movement of persons will end:<\/strong> UK citizens will no longer have the freedom to work, study, start a business or live in the EU. They will need visas for long-term stays in the EU. Border checks will apply, passports will need to be stamped, and EU pet passports will no longer be valid for UK residents.<\/em><\/p>\n\n\n\n The free movement of goods will end:<\/strong> Customs checks and controls will apply to all UK exports entering the EU. UK agri-food consignments will have to have health certificates and undergo sanitary and phytosanitary controls at Member States\u2019 border inspection posts. This will cost UK businesses time and money.<\/em><\/p>\n\n\n\n The free movement of services will end:<\/strong> UK service providers will no longer benefit from the country-of-origin principle. They will have to comply with the \u2013 varying \u2013 rules of each Member State, or relocate to the EU if they want to continue operating as they do today. There will be no more mutual recognition of professional qualifications. UK financial services firms will lose their financial services passports.<\/em><\/p>\n\n\n\n The UK, not immune to the Covid-19 pandemic, has generally not experienced the same risk-taking fervor that seems to have swept through sectors of the eurozone recently.<\/p>\n\n\n\n For example, while Germany\u2019s blue chip stock index \u2013 the DAX \u2013 has gained around 13.5% YTD in 2020, the UK\u2019s FTSE 100 index has shed more than 10.76% of its value over the same period.<\/p>\n\n\n\n Overall, analysts\u2019 prospects for a brighter economic picture in the eurozone as 2021 progresses generally appear to prevail, as German manufacturing, fiscal and monetary policy stimulus, and vaccine rollouts help boost sentiment.<\/p>\n\n\n\n Updates on the eurozone\u2019s manufacturing, services, and retail sectors, as well as reports on consumer and economic confidence, are among the long list of releases set for the week ahead. <\/p>\n\n\n\n Friday, Jan 7<\/strong><\/p>\n\n\n\n In the meantime, select the Event Calendar option in the IBKR Trader Workstation for a full list of U.S. and global corporate events and earnings, dividend schedules, economic data, IPOs and more.<\/p>\n\n\n\n Market participants in the week ahead are set to receive fresh reports on the health of the eurozone\u2019s economy, while the United Kingdom enters the new year with a formal departure from the EU. <\/p>\n","protected":false},"author":2,"featured_media":42746,"comment_status":"closed","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,18,8,9,26,3],"tags":[9016,579,154],"contributors-categories":[13576],"class_list":{"0":"post-71106","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-europe-middle-east-africa","8":"category-macro","9":"category-region","10":"category-securities","11":"category-text-articles","12":"category-traders-insight","13":"tag-credit-default-swap","14":"tag-eurozone","15":"tag-growth","16":"contributors-categories-interactive-brokers"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n![\"IHS](\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/01\/002_Markit-PMI-1100x619.jpg\")
<\/figure>\n\n\n\n![\"Eurozone](\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/02\/Screenshot-2023-02-28-141253-1100x626.jpg\")
<\/figure>\n\n\n\n![\"Eurozone](\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/02\/Screenshot-2023-02-28-141334-1100x605.jpg\")
<\/figure>\n\n\n\nCutting Ties<\/strong><\/h2>\n\n\n\n
On the Calendar:<\/strong><\/h2>\n\n\n\n
Monday, Jan 4<\/strong><\/h3>\n\n\n\n
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Wednesday, Jan 6<\/strong><\/h3>\n\n\n\n
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Thursday, Jan 7<\/strong><\/p>\n\n\n\n\n
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<\/strong><\/h3>\n\n\n\n
![\"\"](\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/01\/LAST_TWS_1-1100x619.jpg\")
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