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Here is what you need to know on Friday, December 18:

The market mood has soured amid profit-taking, concerns about a major hacking into US federal agencies, weak US data, and new US sanctions on China. The lack of white smoke in Brexit and US stimulus talks also weighs and these negotiations remain in focus.

Major hack: US authorities continue unveiling a broad hack into federal agencies – including the ones related to nuclear facilities – that have been going on since March. The suspicion falls on a group of elite Russian hackers, who have potentially hit Microsoft. The investigation is ongoing. 

Sino-American relations: Reuters reports that outgoing US President Donald Trump is set to slap new sanctions on Chinese companies including SMC. 

Profit-taking: Markets hit new highs and the dollar hit new lows against the euro, pound, Aussie, and other currencies on Thursday. Many traders leave for their Christmas holidays this weekend and may want to cash in on previous trades. 

Stimulus: After it seemed that a relief package is imminent, Republicans and Democrats are still at odds over several details, perhaps pushing back a deal to the weekend or next week. A boost of around $900 billion is on the cards, and gold retreated from the highs in response to the delay.

US jobless claims disappointed with an increase to 885,000 last week, indicating a further deterioration in the economy, one day after Retail Sales figures for November fell short of estimates.

US Initial Jobless Claims confirm labor deterioration while Building Permits look ahead

Brexit: Talks are “blocked” according to David Frost, the Chief UK Negotiator and Prime Minister Boris Johnson said that discussions are in a serious condition. GBP/USD has dropped to around 1.3550 from the peak of 1.3622. 

The Bank of England left its policy largely unchanged, extending one lending program. Over 60% of the UK population is now under severe Tier rules yet the bank notes fewer downside risks due to the vaccine. UK Retail Sales fell by 3.8% in November, roughly within expectations. 

Vaccine: A committee at the Food and Drugs Administration voted almost unanimously to approve the Moderna vaccine, paving its way for approval. Vice-President Mike Pence will receive the jab on Friday in a televised event and President-elect Joe Biden will follow Pence later on. The EU will begin its vaccination campaign, using the Pfizer/BioNTech 

Virus: US COVID-19 statistics continue rising at an alarming pace, with no signs of easing. The Greater Los Angeles area is currently the hardest-hit, and rural areas in the Midwest continue suffering. 

French President Emmanuel Macron tested positive for coronavirus and forced several other leaders to self-isolate– as he may have been infected during the latest EU Summit. Sweden´s King lamented his country’s failure in dealing with the disease. Christmas will likely see restrictions across the continent. 

The German IFO Business Climate stands out on the European calendar, and it carries expectations for a minor. 

The Bank of Japan left its policy unchanged as expected and extended one of its special programs by six months. The yen is marginally lower. 

Bitcoin has been consolidating its meteoric gains around $23,000. Other cryptocurrencies are following BTC’s lead. 

USD/CAD is stabilizing at the 1.27 handle as oil prices slip off the highs and ahead of Canadian Retail Sales figures. 

Can dethroned King Dollar make a comeback? Santa’s market gifts are generous but not infinite