Tuesday, 21st November: European equities are once again brushing off any political fears amid the breakdown in German coalition talks at the weekend. As a recap, talks to form the next German coalition government between the pro-business Free Democrats (FDP) and environmentalist Greens failed after 12 hours of talks on Sunday. There has been no further development with Angela Merkel effectively ruling out a minority government and the SPD ruling out a return to a Grand Coalition. Without further talks it looks likely that Germans will return to polling stations for a snap election in the new year.

In the UK easyJet soared to the top of the main index, rising more than 6.5% (closing +5.09%) after posting full year results with rising revenues but falling profits, although the latter was as expected. Passenger traffic has risen to 80.2m and the group’s load factor, which measures how full the plane is when in the air, was at 92.6%. Although revenues at the start of their fiscal 2018 year are reportedly strong, and forward bookings for the first quarter are ahead, the group’s recent addition of Air Berlin assets (announced after the period end) looks set to lead to 2018 full-year profit falling. The group are looking at £160m in costs related the Air Berlin deal, with the business looking to be earnings enhancing from 2019 and beyond.

As UK Chancellor Philip Hammond finalises his Budget speech for tomorrow, public sector borrowing has unexpectedly risen as the economic slowdown in the UK this year is being felt in government revenues. The deficit stands at £8bn, up 6.9% compared to October 2016, and above the £7bn deficit expected. The shortfall has been driven by rising debt costs linked to the UK’s higher inflation since Brexit, while corporation taxes fell and growth in VAT revenues slowed.

As US citizens get their turkey ready to stuff for Thanksgiving this week, equity and bond markets across the Atlantic are set for a short week. Major equity markets on both sides of the Atlantic are stronger with US indices pushing to further record highs.