Time for a quick recap.

• Encouraging economic data from Germany and the UK have raised optimism in the markets, alongside another dose of trade war optimism.
  
  
• German business confidence has picked up this month, according to the IFO survey. Businesses are more upbeat about future prospects, despite the ongoing factory recession.
  
  
• After months of tough trading, UK retailers have reported that the situation stabilised this month. This may be a sign that Christmas spending will hold up well.

Here’s the full story:

• Hong Kong’s stock market has surged, after pro-democracy candidates swept to victory in council elections today.

• Transport for London has refused to renew Uber’s licence, saying the ride-hailing site hasn’t done enough to protect customers. Uber plans to appeal, and says the decision is unfair.

• China has announced new protections for intellectual property rights - a key demand of US negotiators. This could be a sign that the two sides are nearing a preliminary trade deal, following optimistic comments from Donald Trump in recent days.
  
  
• There’s a double-dose of deal fever today, with LVMH buying Tiffany’s and Viagogo snapping up StubHub.

Shares in eBay have jumped 2.6% in early trading in New York, as traders welcome the sale of StubHub.

But Uber is having a difficult day, with shares down almost 2% after London authorities refused to renew its licence (pending an appeal....).

US farmers must be getting desperate for a trade war breakthrough.

Data released today show that Chinese imports of American soybeans have hit a three-month low -- with Brazil taking up some of the slack.

Optimism of a breakthrough in the US-China trade war is continuing to lift markets.

In London the FTSE 100 is now 70 points higher at 7396, its highest level in nearly a week.

Industrials, consumer cyclical firms and tech companies are among the risers, reflecting hopes that Washington and Beijing will (eventually) sign off a phase one trade deal.

LVMH’s capture of Tiffany’s today (see earlier post) shows that the luxury end of retail is still hot, despite the global slowdown.

Here’s Kate Swaine, partner at legal firm Gowling WLG:

It is interesting to witness further consolidation across the luxury goods sector, following hot on the heels of Michael Kors’ 2018 purchase of Versace.

At a time when the retail market is challenging, the luxury end of the sector has proved resilient to the slowdown in economic growth. This purchase demonstrates the appetite for investment and expansion even at the heights of the sector.

Gareth Shaw, Head of Money, Which?, fears TSB customers will lose out once it shuts 86 of its branches across the UK:

“Bank customers are still enduring almost daily IT glitches, which is why everyday banking services and access to cash - which is a vital back-up - must be protected. The next government should urgently intervene with legislation that protects access to cash for as long as it is needed.

Britain’s financial sector continues to shed staff at a heady rate, as banks try to slash costs and keep up with technological changes.

Today the ace is hovering over TSB, which is planning to shut 86 branches - one in seven of its estate - just six years after being spun out of Lloyds.

That will eliminate up to 400 jobs - grim news in the run-up to Christmas.

Uber’s CEO, Dara Khosrowshahi, has hit out at Transport for London’s decision not to renew his company’s licence.

He insists Uber has made ‘fundamental’ changes, and will fight the ruling.

But what about today’s revelation that at least 14,000 Uber journeys took place with the ‘wrong driver’ at the wheel?

London Mayor Sadiq Khan says this is unacceptable; Uber hasn’t yet proved it has ‘robust’ procedures in place to prevent a repeat.

(the company, though, will point to its facial recognition work that could thwart rogue drivers who upload their own photos).

The improved CBI retail sales report could be a sign that shoppers will hit the high street with gusto this Christmas.

So argues Howard Archer of the EY Item Club:

The CBI survey offers the retailers genuine hope that consumers are prepared to loosen their purse strings for the critical Christmas period; and suggests that some of the recent lacklustre sales performance has been due to consumers taking a breather before splashing out over the festive season. The survey indicates that retailers are relatively upbeat about the Christmas sales outlook for sales with a balance of +21% expecting sales volumes to be up year-on-year in December. This was the first positive expectations balance since June

It also may well be that some consumers have recently held back on their retail sales, waiting for Black Friday price cuts and promotions in the latter part of November. However, the evidence of recent years suggests that Black Friday tends to have more of an impact in distorting the timing of retail sales rather than boosting them overall.

Confirmation that retailers are reluctant to invest:

Here’s Anna Leach, CBI Deputy Chief Economist, on today’s retail survey:

“Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year. Actual sales have also stabilised and have nudged above average for the time of year. And employment has stopped falling after three years of decline.

But Brexit uncertainty continues to weigh on investment plans for the year ahead which remain weak.

Uber has hit back, saying it is “extraordinary and wrong” of TFL not to renew its London licence.

The company says it has audited all its London drivers in the last two months, and is setting up a new “facial matching” process to protect passengers.

It also confirms it will appeal, meaning it can keep operating.

Fans of Uber shouldn’t delete the app quite yet, though.

If Uber appeals this morning’s ruling (which surely it will), it can keep operating in the UK capital through the extra-busy Christmas period.

Here’s the full story on Uber getting the red card in London.

Alarmingly, TFL says that at least 14,000 Uber journeys were carried out by unauthorised drivers, who managed to upload their photos into other drivers’ accounts.

That allowed them to appear to be legitimate Uber operatives (who would have been through its vetting procedure). But they could actually have been uninsured, and a potential safety risk.

Economist Daniel Lacalle points out that Germany’s economy still looks weak, even if business conditions are improving:

Thee pick-up in German business optimism, after a largely torrid year, is welcome, say trading platform BP Prime:

This tweet shows how German business optimism had been falling steadily since early 2018:

The key points from IFO’s healthcheck on Germany:

IFO reckons that this Christmas will be “very good” for German businesses, following today’s pick-up in confidence.

It predicts that the economy will grow by 0.2% in the current quarter, following the 0.1% growth in Q3, led by consumer spending, construction, and the government.

But, the institute is still concerned that Germany’s factory sector is shrinking, so it’s “too early” to say the economy has turned around.

IFO chief economist Klaus Wohlrabe told Reuters:

“Companies tell us that industrial order backlogs are still not satisfactory,”

China’s Global Times newspaper is reporting that Beijing and Washington are “very close” to a phase one trade deal.

It also criticised “negative” media reports claiming that the negotiations are in trouble.

That’s significant, as the tabloid is controlled by China’s communist party.

China’s government hasn’t given up hopes of a deal either.

Foreign ministry spokesman Geng Shuang has reiterated that Beijing would like Washington to work with it to resolve the outstanding trade issues on a basis of equality and mutual respect, Reuters reports.

European stock markets are starting the new week on the front foot too.

Here’s the opening moves:

• FTSE 100: up 46 points at 7,373, up 0.6%
• Germany’s DAX: up 98 points at 13,261, up 0.75%
• French CAC: up 30 points at 5,923, up 0.5%

Neil Wilson of Markets.com says Beijing’s compromise on IP protection is lifting equities.

We’ve had progress in an important area – China has appeared to relent to a degree on intellectual property, a key sticking point to the talks thus far. Beijing on Sunday said it will increase penalties for IP violations, and lower the bar for criminal proceedings to be brought in cases of alleged IP theft.

This could be an important step forward, but we as ever will only believe it when we see it. The focus is on agreeing some kind of phase one deal before the Dec 15th deadline for about $150bn in tariffs to raise.

All the major Asia-Pacific markets are higher today, following the Hong Kong election results.

The Hang Seng is the best performer (+1.5%), followed by South Korea’s KOSPI (+1%), China’s CSI300 (+0.7%), and Australia’s S&P/ASX 200 (+0.3%).

Hopes of a trade war breakthrough are also a factor, points out Kyle Rodda of IG:

Naturally, the Hang Seng is hypersensitive to trade-war developments, and the weekend’s positive news on that front has boosted Hong Kong stocks. But on top of that, the market seems to have taken kindly to the weekend’s Hong Kong’s district council election results, which saw pro-democracy candidates capture significant gains.

More importantly, the weekend’s vote past without a major escalation in street violence between police and protesters.

The election results are a turning point, and “a slap on the cheek” for Hong Kong CEO Carrie Lam’s administration, say political analysts.

My colleague Verna Yu explains:

Pro-democracy politicians took control of nearly all of the city’s 18 district councils in what analysts said was a unanimous vote of no confidence in the government.

Joseph Cheng, retired political science professor at the City University of Hong Kong, said Hong Kong people had seized the opportunity to express their dissatisfaction in the government and wanted to put pressure on the government to respond to their political demands.

“They have not given up on their support for the pro-democracy camp and the protesters,” Cheng said. “This is a slap on the cheek for Carrie Lam’s administration who insisted that the silent majority was supporting the government.”