Market Update

The "get Brexit done" slogan resonated not just with UK voters but also with the country's equities, contributing to the post-election euphoria that saw the FTSE-100 performing exceptionally well throughout the week.
The strength of UK equities was bolstered by a weakening pound, a consequence of the new law guaranteeing that the Brexit transition with the EU would not extend beyond December 2020. This caused the pound to erase all gains from the election rally on December 12, 2019, closing the week at $1.3021.
Additionally, UK's Consumer Price Index (CPI) inflation remained unchanged at 1.5% in November, marking the smallest increase since November 2016 and staying below the Bank of England's 2% target. The pound's strength since hitting a low of $1.206 in August 2019, which reduces import costs due to the stronger currency, hinted at restrained inflation in the future. However, this didn't sway the Bank of England policymakers, who voted 7-2 on December 19, 2019, to keep UK interest rates unchanged.
Meanwhile, in the US, the House of Representatives voted to impeach President Donald Trump. Despite making headlines globally, equity markets largely disregarded the event. The focus remained on the Senate, controlled by Republicans, where the decision about Trump's conviction and removal from office would be made. Given the political dynamics, he was expected to be acquitted, potentially making him the only impeached president to secure his party's nomination for re-election.
Looking ahead, the holiday season meant a quiet period for market updates. Major data releases included US durable goods orders and Japanese retail sales and unemployment. As market news typically slows down during this time, the next Weekly Market Summary was scheduled for January 6, 2020. Any significant changes or events would prompt an immediate Market Update.
Wishing you the best for the festive season and the upcoming year.