Oil prices are expected to log their seventh straight week of gains today as the Covid vaccine rollout raised hopes that the energy market pick-up was in sight.

Brent crude prices are currently up around 0.3% at roughly $51.66 per barrel.

WTI has seen a stronger rise of 0.5% at $48.61.

Vaccine hopes and expectations around - yes, that’s right - that US Covid aid package, are helping keep spirits high, despite stricter lockdowns across Europe that have been sparked by significant jumps in positive cases and deaths.

BREAKING: Sky News is reporting that Next and a US investor are in talks about a bid for Arcadia Group.

John Lewis is working with the NHS to organise free Covid-19 testing for staff at 40 of its sites – including warehouses and stores – in a pilot scheme that could be taken up by other firms and schools.

The business, which also owns Waitrose supermarkets, has been testing lateral flow tests at its Magna Park distribution centre in Milton Keynes since November, and is testing up to 1,000 members of staff up to three times a week. Only four have so far tested positive for the virus.

The scheme is being expanded to 16,000 employees and temporary agency staff each week across the business’s parcel sorting depots, the John Lewis textiles factory and some Waitrose and John Lewis shops.

Testing is voluntary and carried out in a room set up temporarily at each location. Workers can use a kit that enables them to take a swab from their throat that can be handed to a John Lewis member of staff trained by the NHS.

It is hoped the scheme will help protect staff and customers and reduce absences and disruption during the festive season, the busiest trading time of the year.

The stock market recovery across is proving to be temporary, with the FTSE 100 and Germany’s DAX among the only indexes still in positive territory across Europe.

The continued uncertainty around Brexit and the US Covid aid package, which has yet to be areed, is making it hard for investors to choose a direction of travel on stocks.

Stephen Innes, Chief Global Markets Strategist at axi, says:

In news that will surprise nobody, the two main issues for markets ahead of the weekend, Brexit and US stimulus, remain unresolved. And while sentiment has cheered positive political headlines on the US side of the pond, the same can’t be said for the other side.

It is a pretty important day in US Congress, with government spending authority running out at midnight and Congressional leaders preparing the second-largest stimulus relief package in history.

The deadline for Covid-19 relief was supposed to be today, but it now looks like negotiations will go at least through the weekend.

And this will present some Monday gap risk that risk managers would probably be more inclined to err on the side of caution for no other reason than we are approaching year-end. Still, the risk is far from binary, so I can’t see trading floor heads giving in that easy unless things go sideways later today.

Lloyds Banking Group has cancelled staff bonuses for 2020 after missing financial targets and suffering a sharp drop in profits during the Covid crisis.

The bank told staff across its Halifax, Lloyds and Bank of Scotland brands on Thursday that it was making an early announcement on bonuses in light of the challenging economic outlook, having already suffered an 85% drop in profits to £434m over first nine months of the year.

It is one of the most dramatic changes to Lloyds’ bonus policy in recent memory, having made headlines last year for merely cutting bonus pool for the first time in four years to £310m in 2019, down from £465m in 2018.

The decision has not changed fortunes for outgoing chief executive António Horta-Osório, who confirmed earlier this year that he would waive this year’s bonus, worth as much as £1.8 million. William Chalmers, the finance chief also ruled himself out of a payout worth up to approximately £800,000.

The nixed bonus pool means Lloyds will avoid what uncomfortable questions from UK regulators, who warned last week that they would be keeping a close eye on cash bonuses for bankers in light of the continued economic uncertainty.

But the cancellation could prove controversial, if the bank decides to distribute shareholder dividends in the new year, despite withholding extra pay for its workers. The Bank of England last week lifted its temporary ban on dividends, but told lenders it would cap payouts until at least mid-2021

Lloyds Banking Group said in a statement:

Given our expected levels of profitability for 2020, we are unable to pay Group Performance Share (or bonus) awards to our people for this year. This decision on bonuses in no way reflects the hard work and commitment our people have made throughout this extraordinary year to keep our businesses operating strongly and to provide support and help to our consumer and business customers.

British American Tobacco and Imperial Brands profited from child labour, exploitation and dangerous conditions on tobacco farms in Malawi, according to a legal claim launched after a Guardian investigation.

The British firms, which reported combined earnings of £12.5bn last year, should compensate 7,020 children and adults who work in their supply chain, according to documents filed at the high court by the law firm Leigh Day.

The claim alleges “widespread use of unlawful child labour, unlawful forced labour and the systematic exposure of vulnerable and impoverished adults and children to extremely hazardous working conditions with minimal protection against industrial accidents, injuries and diseases”.

Leigh Day said the tobacco industry was structured to give the multinational cigarette companies the appearance of separation from working conditions in the tobacco fields.

Firms such as BAT and Imperial typically buy the leaves via third-party dealers, who in turn source them from contract farmers.

But the two companies were aware of the conditions faced by farmers in Malawi, including children, according to the claim, and had previously indicated they exert a high degree of control over conditions in their supply chains.

US future are pointing to a flat open on Wall Street this afternoon:

• Dow futures are down 0.03%
• S&P 500 futures are up 0.05%
• Nasdaq futures are flat

It comes after a new set of record highs in the US overnight, when the Dow closed above symbolic 30,000 mark reached last month.

Connor Campbell, a financial analyst at SpreadEx said US stocks are now waiting around for further news about a $900bn Covid aid bill:

Closing above 30,300 last night, the Dow Jones currently doesn’t have much pencilled in for this afternoon. It is likely waiting for an update on stimulus negotiations – the deadline was meant to be this evening, but might now be pushed to over the weekend, after disagreements regarding the future of the Federal Reserve’s crisis management.

The UK’s competition watchdog may launch another investigation into the funerals sector after Covid passes, saying it still has “serious concerns” about a lack of transparency across the industry.

The warning comes as the Competition and Markets Authority today released provisional conclusions to its investigation, which was first launched in March 2019.

It has put forward a number of recommendations including:

• Funeral directors and crematoriums need to disclosure prices in a way that help customers make more informed decisions

• Customers must be given price information before committing to pay for a service so that they know the key terms and how they will be charged (for example, if they have to put down a deposit)

• Customers should be made aware of any relevant business, financial and commercial interests of the funeral director. Certain practices – such as payments which may incentivise hospitals, care homes or hospices to refer customers to a particular funeral director – will be banned
  
  
• Government should establish an independent inspection and registration regime to monitor the quality of funeral director services. It’s meant to be a first step towards setting up a broader set of regulations for the industry

The BT subsidiary Openreach is to hire more than 5,000 engineers to accelerate the rollout of next-generation full-fibre broadband across the UK, my colleague Mark Sweney writes.

Openreach, which controls most of the UK’s broadband network, is investing £12bn to connect 20m homes and businesses by the end of the decade. About 2,500 of the new roles will be at Openreach and 2,800 will be created at its construction partners.

It said people did not need engineering skills to apply for the jobs – among its recent recruits have been shop workers, former military personnel and a trainee vet.

The UK has been a global laggard in the rollout of full-fibre broadband. About only 18% of households have access to it, while many developed countries are beyond 80%, with BT’s Openreach sticking to its old copper network instead of investing in new technology.

Openreach has ramped up the speed of rollout, enabling 40,000 homes each week to get access, the equivalent of a premise every 15 seconds. This rate will need to rise to about 50,000 homes per week to hit Openreach’s target.

Making full-fibre broadband available across the country by 2025 was a key promise of Boris Johnson’s election manifesto. Since then, the government has watered down its ambitions to 85% coverage, including homes that can access similar gigabit-speed technology via 5G network signals and copper wires as well as full fibre.

Catching up on data this morning, the Ifo business climate index shows morale among German businesses unexpectedly rose in December despite new Covid lockdown measures.

The survey came in at 92.1, marking an improvement on 90.9 in November.

Ifo president Clemens Fuest said, according to Reuters:

Companies were satisfied with their business situation. They are looking at the first half of the year with less scepticism. But the lockdown is hitting some branches hard, The German economy as a whole is showing its resilience.

But some analyst are warning against being carried away by the strong figures.

Carsten Brzeski, Global Head of Macro at ING says the German economy has effectively entered a period of hibernation and it will likely take until Q2 2021 until a significant rebound comes to pass.

Others, meanwhile , reckon that the data may be too old to count.

Michael Hewson, chief market analyst at CMC Markets UK says the data probably was completed before the German government suddenly announced its strict lockdown into next year, “thus making it completely out of date.”

Brezski explains that businesses did have the chance to fill in the survey before the lockdown came into force last Sunday:

Therefore, the higher Ifo reading probably tells us more about the news and the rolling out of the vaccine, rather than the new lockdown measures.

Full story: Retail sales fell by 3.8% in November on the previous month as the coronavirus lockdown in England and restrictions elsewhere in the UK shut much of the high street.

Ending a six-month run of rising sales, the figures revealed the impact of the pandemic on the sector as the infection rate increased across the country.

A 19% fall in clothing sales followed the closure of most department stores and non-essential shops.

A government message that workers should stay at home if they could caused car journeys to slump and petrol sales to follow suit with a 16.6% decline.

The Office for National Statistics said 90% of businesses continued to trade in some form through the month, mostly via a click-and-collect service. But only 68.8% of department stores continued trading.

Meanwhile, many online retailers reported a boom in sales, as they did during the UK-wide lockdown in spring, though heavy discounting helped to keep the tills ringing.

The ONS said this week that price cutting by clothing retailers last month pushed UK inflation down to 0.3%, from 0.7% a month earlier. The Bank of England’s inflation target is 2%.

More here:

The shift to online shopping has helped cushion the blow of lockdown for the wider UK retail sector.

ING’s developed markets economist James Smith explains:

All things considered, the fact that UK retail sales (ex fuel) fell by ‘only’ 2.6% in November is pretty remarkable. This means that despite lockdowns across most of the UK, the level of spending is still higher than where it was in August, and comfortably above its pre-virus level.

Unsurprisingly though, this solid aggregate performance masks huge shifts in spending patterns beneath the surface.

Online spending rose by over 40% during the first lockdown and has not really fallen back since.

On the high street, it is a much different story. Clothing/footwear sales for instance never recovered to pre-virus levels, and November’s lockdown now means this category is 30% down on January levels.

We suspect this is partly linked to the ongoing restrictions on hospitality - a principle reason for buying new outfits is for particular occasions or seasons, and less socialisation and holidaying means demand is unsurprisingly lower.

European stocks have reversed their losses since the open, with nearly all major indexes now trading in the black:

• FTSE 100 is up 0.5%
• FTSE 250 is flat
• Germany’s DAX is up 0.1%
• France’s CAC 40 is flat
• Italy’s FTSE MIB is up 0.3%

And could it actually be...the final countdown?

And we’re off! European markets are open for trading and here’s how initial prints are looking:

• FTSE 100 is down 0.05%
• FTSE 250 is down 0.1%
• France’s CAC 40 is down 0.4%
• Germany’s DAX is down 0.3%
• Spain’s IBEX is down 0.5%
  

Asian stock markets slipped overnight.

The Nikkei edged lower by 0.16%, the Hang Seng slumped 0.9% while over in Shanghai stocks fell nearly 0.3%.

European stocks are expected to follow suit: