The Democrats are now in charge but by slim margins. At least Trump’s parting antics must have ensured that we won’t see his brand of leadership again but some of his appointees still have the capacity to do damage in the final days of his administration, cue the Comptroller of the Currency relaxing regulations to allow just about anyone to become a bank in a final swipe at Wall St for taking a stand and not lending to Trump’s pet causes.

Biden moved swiftly to appoint former Fed Chair Yellen as Secretary of the Treasury, a fine choice for coherent relations with the Fed. Trump’s best appointee (that he then continually undermined and tried to remove) Fed Chairman Jay Powell will leave big shoes to fill, he and his team have done an outstanding job. In a recent interview, he reiterated that now is not the time to even consider raising rates; ‘the time to raise rates is no time soon’ or withdrawing accommodation/facilities. Unsurprisingly the Fed is very keen to avoid the taper tantrum of 2013 and he said that the FOMC will let the world know when it is appropriate to discuss dates (to taper). He also reiterated just how effective the backstops put in place have been and financial markets can certainly be grateful for that. However, as markets look through the current deadly virus spikes and price in what could be dramatic pent-up demand leading to a strong recovery and normalisation, longer duration assets have moved sharply with the 10-year now well over 1% and the Long Bond nearly at 2%.

As Britain left Europe, we did in the end have some sort of a deal albeit a skinny one; discussions have not even begun concerning industries such as financial services. The reality of European share trading leaving London completely on day one was no surprise to those who remember Bund futures upping sticks from LIFFE overnight, but serves as a warning.

Credit spreads ended the year strongly and have begun 2021 on a sound note not far off their tights. 2020 broke all records regarding primary market issuance ($2 trillion into USD) and of the 75 odd issues into sterling, all performed well with an average spread performance of +53bp versus reoffer.