In Brief

UK & Europe

• COVID-19 vaccine approvals and shipments set the year-end tone for financial markets, injecting momentum into equities even as virus caseloads swelled and investors took U.S. presidential election and Brexit cliff-hangers in stride.

• The European Central Bank expanded its emergency bond buying, continuing its “whatever it takes” approach; market pricing implied expectations the Bank of England (BoE) will move to negative rates in 2021.

• With excess liquidity surging to new highs and yield curves flattening, our portfolio managers added longer duration securities to lock in yield, purchased new issues and added back high-quality corporate securities.

• While 2021 is expected to see a return to normality and improving growth, continued lockdowns will remain an economic headwind; we expect low central bank rates for the foreseeable future.