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Trump waits for electoral college, vaccine heads for new trial, and OPEC+ has a meeting about a meeting. 


President Donald Trump said he'll give up power if the Electoral College affirms Joe Biden's win. Those electors are due to vote on Dec. 14, with the president of the Senate receiving the results of those votes by Dec. 23. Trump remained defiant about the results of the election, saying it was a fraud, and hinting that he might still urge state legislatures to reject the vote and appoint their own electors to flip states to him. President-elect Biden delivered a Thanksgiving speech that warned of a long winter as coronavirus cases and deaths rise nationally.


The spread of the virus continues to show little sign of being contained in the U.S., with California's positive-test rate hitting 6.1%, the highest in six months and New York hospitalizations rising to their level since June 1. AstraZeneca Plc's Covid-19 vaccine looks like it's headed for an additional global trial as the drugmaker tries to clear up uncertainty and confusion surrounding favorable results in its current study. German cases surpassed 1 million, with the government there extending a partial shutdown until just before Christmas. 

Oil meeting 

Crude's strong November rally seems to be fizzling out a little today as tensions emerge among members of OPEC and its allies over a proposal to extend current supply curbs. Iraq, the United Arab Emirates and Nigeria have all vented their frustration with the current deal ahead of the scheduled meeting to decide on production levels. The disagreements have become loud enough that Saudi Arabia and Russia summoned OPEC+ ministers for last-minute informal talks tomorrow to smooth the path towards a deal next week. 

Markets quiet

Global stock investors are having a calm end to what has been a busy Thanksgiving week. Overnight, the MSCI Asia Pacific Index added 0.2% while Japan's Topix index closed 0.5% higher. In Europe, the Stoxx 600 Index was broadly unchanged at 5:50 a.m. Eastern Time, with the gauge remaining on track for its biggest ever monthly gain. S&P 500 futures pointed to a quiet open, the 10-year Treasury yield was at 0.86% and gold was lower. Equity trading ends at 1:00 p.m. today and the bond market closes at 2:00 p.m. 

Brexit, dividends

Michel Barnier, the EU's chief negotiator, warned that big disagreements between both sides still exist. He travels to London today for further talks on securing a deal on the trading arrangement between the EU and U.K. before the latter's exit from the single market at the end of the year.  There was some good news for holders of euro-area bank stocks with European Central Bank Executive Board member Fabio Panetta saying he is open to allowing some banks to resume paying dividends next year

What we've been reading

This is what's caught our eye over the last 24 hours.

And finally, here's what Emily's interested in this morning

If confirmed, Janet Yellen will be the first Treasury secretary to have served as chair of both the White House Council of Economic Advisers and the Federal Reserve. Her extraordinary qualifications augur a tighter coordination between fiscal and monetary policies at a critical juncture.

Emergency programs terminated by the previous administration -- including the little-used and much-criticized Main Street facility aimed at lending to small businesses -- may need to be rebooted or reworked, so that relief for households and businesses stricken by the pandemic can be stepped up and better targeted. This cooperation would be akin to new dawn after several years of White House attacks on the Fed's leadership and policies. 

"Yellen will work well with the Fed, which could be useful in the near term in re-establishing the 13(3) facilities and potentially using them more aggressively to support mid-sized businesses and state and local governments in particular," says Julia Coronado, founder of MacroPolicy Perspectives LLC and a former Fed economist.

"Her nomination not only shatters another glass ceiling, it gets the Administration's economic policy off on a solid footing."

Yellen is widely heralded as a dove at a time when the world most needs them. She is best known for making a powerful case for low interest rates to create jobs, writing in a recent op-ed that "when unemployment is exceptionally high and inflation is historically low…the economy needs more fiscal spending to support hiring."

The dove shorthand is tinged with irony -- Yellen presided over one of the Fed's pivotal hawkish moves, raising interest rates for the first time in a decade after the global financial crisis. (And though the lift-off was long delayed, under the Fed's revised inflation-targeting strategy it now qualifies as premature.)

And at the Treasury, she'll likely be pushing an expansive economic policy as the fiscal tone turns more hawkish. A Republican-controlled Senate would turn sharp eyes back on the deficit -- which was inflated even before the pandemic by tax cuts that they'll not want to see repealed.

And borrowing to fund further relief efforts -- not to mention the Biden Administration's planned $2 trillion "Build it Back Better" infrastructure program -- probably won't be as cheap as it was under Yellen's predecessor. Treasury Secretary Steven Mnuchin was able to sell government debt at a record pace at the lowest interest rates in history, thanks to the Federal Reserve's emergency actions in cutting borrowing costs.

In 2021, the prospect of a vaccine and gradual economic recovery should see the 10-year benchmark rate lift off its lows. But even if this year's 0.5% was the trough, it's unlikely to get close to levels north of 2% seen the last time an austerity battle was raging in the U.S. JPMorgan sees the benchmark peaking at 1.3% by the end of the year. As for how fast it gets there, and how much more room it has to rise, all eyes will be on the Fed, for any signs of flinching in its commitment to keep rates rock-bottom for years to come to ensure a full economic recovery. 

Follow Bloomberg's Emily Barrett on Twitter at @notthatECB

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