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D-PIMS Weekly Market Update - Week of 12th to 18th October 2020

Today’s Monday Update:

Over the course of last week, headlines were dominated by Brexit and the Coronavirus:

• The Bank of England asked banks on Monday how ready they are for zero or negative interest rates, following up its announcement last month that it was considering how to take rates below zero if necessary. Other central banks have pushed rates into negative territory in an attempt to spur banks to lend more, and the BoE announced in September that it was looking into what such a policy might mean in Britain.

• The EU on Tuesday demanded “substantive” movement from Britain on fisheries, dispute settlement and guarantees of fair competition in their post-Brexit trade talks, which Germany said were at a “critical stage”. France said the 27-nation bloc must not yield on fishing rights. Ireland - the EU member most exposed to any abrupt economic split at the end of the year - said Britain was running out of time to seal a new trade deal with the bloc.

Prime Minister Boris Johnson told his top cabinet ministers on Tuesday he wanted a free trade deal with the European Union on the right terms, but ending the year without one held “no fear”.

• On Wednesday, the European Union and Britain were set to prolong Brexit talks past a mid-October deadline to try to bridge persistent gaps holding up a new agreement, according to sources and documents. The EU summit is expected to conclude that progress in talks with Britain is “still not sufficient” to seal a new trading pact now and will also step up preparations for an abrupt split without a deal to avoid trade tariffs or quotas, from 2021.

• European Union leaders meeting in Brussels on Thursday pressured Britain for concessions in their troubled Brexit talks, saying a trillion euros worth of trade could be sunk if London does not budge on fisheries, fair competition and solving disputes.

Scientists from Oxford University have developed a rapid COVID-19 test able to identify the coronavirus in less than five minutes, researchers said on Thursday, adding it could be used in mass testing at airports and businesses. The university said it hoped to start product development of the testing device in early 2021 and have an approved device available six months afterwards.

Also on Thursday, it was announced that London, would enter a tighter COVID-19 lockdown from midnight on Friday as the Prime Minister seeks to tackle a swiftly accelerating second coronavirus wave. Health Secretary Matt Hancock said London, which has a population of 9 million, as well as the adjacent, heavily populated county of Essex, would be put on “high” alert level, up from “medium”, at one minute past midnight.

• Prime Minister Boris Johnson said on Friday it was now time to prepare for a no-trade deal Brexit, as the European Union had refused to negotiate seriously and that unless Brussels changed course there would not be an agreement. “I have concluded that we should get ready for January 1 with arrangements that are more like Australia’s, based on simple principles of global free trade,” Johnson said. “Unless there is a fundamental change of approach, we’re going to go for the Australia solution and we should do it with great confidence,” he said. “It’s becoming clear the EU don’t want to do the type of Canada deal that we originally asked for. It does seem curious that after 45 years of our membership they can offer Canada terms they won’t offer us.”

‘Human challenge’ trials of potential COVID-19 vaccines, where volunteers are deliberately infected with the disease, could become a reality after a British biotech firm said it was in advanced talks with the government to create and provide strains of the virus. Preliminary work for the trials, which aim to speed up the process of determining the efficacy of a vaccine candidate, is being carried out by hVIVO, a unit of pharmaceutical services company Open Orphan, hVIVO said on Friday.

• Over the week, the main Global Stockmarkets where mixed with some up and some down. Despite bad news on the Brexit front, the Pound strengthened, which had some negative affect on returns from overseas Markets. The investment D-PIMS Portfolios were up over the week, helped by some internal currency hedging and their diverse exposure.


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Past Performance is no guarantee of, or guide to future returns.

The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.