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Oil prices hit 11-month high, as markets react to Georgia runoff results – business live


Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Markets are eagerly awaiting results from the Senate run-off elections in Georgia, with a double Democrat victory looking increasingly likely, which would hand them control of the upper house. Democrats already control the lower house, the House of Representatives.

A “blue sweep”of Congress could usher in a larger fiscal stimulus package and pave the way for president-elect Joe Biden to push through more corporation regulation and higher taxes. This has spooked the tech-heavy Nasdaq futures, which are down more than 1%.

Rev Raphael Warnock has defeated the incumbent Republican senator Kelly Loeffler (a Trump ultra-loyalist) to become the next Democratic senator from Georgia, according to AP. Warnock will become the state’s first Black US senator ever. A second run-off race between the Democrat Jon Ossoff, a former documentary film-maker, and the Republican incumbent David Perdue looks to be close.

The oil market has been volatile and prices have hit an 11-month high after Saudi Arabia, the world’s biggest oil producer, agreed to reduce output more than expected in a meeting with the Opec oil cartel and other major producers (a group known as Opec+). Saudi Arabia pledged to cut production by an additional 1m barrels per day in February and March.

Brent crude, the global benchmark, rose nearly 1% to $54.09 a barrel, the highest since late February 2020. US crude climbed to $50.24 a barrel.

Goldman Sachs stuck to its year-end forecast of $65 a barrel for Brent but said in a note:


Despite this bullish supply agreement, we believe Saudi’s decision likely reflects signs of weakening demand as lockdowns return.

In the UK, car sales plunged to their lowest level since 1992 last year – the biggest slump since the second world war – despite a surge in sales of electric cars, according to industry figures. Sales fell by 29% during the year to about 1.63m, according to the Society of Motor Manufacturers and Traders (SMMT).

The timing of the first coronavirus lockdown across the UK last year couldn’t have been worse. It came in March, the month when sales are usually boosted by a change in number plates. Car showrooms were closed in England from late March until June, forcing car companies to adjust plans for production and sales. The data comes as England and Scotland are embarking on another lockdown.

The bosses of the UK’s top companies are paid 115 times more than the average worker, according to research by the High Pay Centre thinktank. This means that they will have made more money by teatime on Wednesday than the average UK worker will earn in the entire year. The chief executives of FTSE 100 companies are paid a median average of £3.6m a year, which works out at 115 times the £31,461 collected by full-time UK workers.

On the data front, the Caixin survey of Chinese services for December was 56.3, less than the 58.1 expected by economists. The previous reading was 57.8. We’ll be getting final reading for services and composite surveys for the eurozone and the UK this morning.

The agenda

  • 8:15am GMT: Spain IHS Markit Services PMI for December (Forecast: 45)
  • 8:45am GMT: Italy Markit Services and Composite PMI for December (Forecast services: 45.3)
  • 8:50am GMT: France Services and Composite PMI (Final) for December (Forecast: 49.6 / 49.2)
  • 8:55am GMT: Germany Markit Services and Composite PMI (Final) for December (Forecast: 47.5 / 52.5)
  • 9:00am GMT: Eurozone Markit Services and Composite PMI (Final) for December (Forecast: 47.3 / 49.8)
  • 9:30am GMT: UK Markit/CIPS Services and Composite PMI (Final) for December (Forecast: 49.9 / 50.7)
  • 1:15pm GMT: US ADP employment report for December (Forecast: 88,000)
  • 2:00pm GMT: Bank of England governor Andrew Bailey speaks at Treasury select committee
  • 2:45pm GMT: US Markit Services and Composite PMI (Final) for December (Forecast: 55.3 / 55.7)
  • 3:00pm GMT: US Factory orders for November (Forecast: 0.7% m/m)
  • 7:00pm GMT: US Fed minutes



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