The Monday note - 11 December 2017

• The FTSE 100 rallied by over 93 points last week to close on Friday at 7,394.0, as investors welcomed the agreement between the UK government and the EU on phase one of Brexit. The ten year Gilt yield stood at 1.28%. 
• GDP growth in Japan in Q3 was significantly revised upwards in the second reading, thanks to strong business investment. Annualised growth stood at 2.5% in Q3, up from 1.4% in the first estimate. 
• The EU finalised a free trade deal with Japan, creating an economic zone with a population of 600 million people, and accounting for 30% of global GDP. The treaty took four years to agree. 
• The US economy saw 228,000 jobs created in November, well ahead of the consensus forecast of 220,000. Unemployment remained steady at 4.1%. 

Chief Economist comments: 

Well, hats off to Theresa May. A few weeks ago there were doubts whether she would be Prime Minister by year end; yet, now we have an agreement to move the Brexit negotiations on to phase two. The weekend press was predictably full of speculation of what ‘full alignment’ meant. However, what caught my attention was Andrew Marr’s interview with David Davis on Sunday, where the Brexit secretary said the chances of the UK defaulting to WTO rules when it leaves the EU had “dropped dramatically”. The darkest hour on Brexit may have passed.