Pfizer vaccine news drives risk-on move

Markets are on the rise after Pfizer outlined plans to apply for an emergency vaccine in a month's time. Meanwhile, Brexit talks show little signs of a breakthrough.

• Pfizer lifts market hopes with speculation of a vaccine in one-month

• Brexit worries persist, as brinksmanship takes us closer to the edge

• US retail sales and consumer confidence lifts hopes of a festive boost

Markets pushed upwards in the final session of the week, with markets regaining lost ground on the news that Pfizer could release a vaccine as soon as November. Meanwhile, the possibility that Pfizer could apply for a US emergency allowance to fast-track their vaccine has helped ease fears over the recent introduction of renewed restrictions throughout Europe. Of course, Pfizers timeline that a vaccine could be approved in just a month remains dependent upon positive research outcomes between now and then. However, the willingness to map out an exact date does convey an admirable degree of confidence that the vaccine is good enough. From a UK perspective, ONS data shows that as many as 1 in 160 people in England could be currently infected with the virus, with the continued growth in cases bringing expectations of further restrictions.

Despite Johnson apparently cancelling Brexit negotiations, the rise in sterling does highlight a wider demand for risk-assets in the wake of the Pfizer announcement. Markets have grown accustomed to hearing bad news in relation to Brexit, yet this latest decision to walk away from talks does highlight the lack of progress that has been evident throughout recent months. With less than three-months left of Brexit talks, we are moving into a phase where this ongoing brinksmanship could lead the UK off a cliff without a parachute. Ordinary negotiations could herald significant concessions in such a game of chicken, yet the fact is that many of these red lines are designated by one particular nation that could veto any concessions.

Improved consumer sentiment and retail sales data out of the US furthered the risk-on mood seen today. Yesterdays increase in the initial jobless claims figure highlights the stuttering recovery in the US, yet todays data signals a willingness to spend despite the ongoing stalemate in congress over a second stimulus package. This latest bout of data bodes well for the retail sector, which will be hoping for a festive balance sheet boost in the coming months.