WSJ City: Markets Cheer Brexit Divorce Deal, Confronting The Brutal Trade-offs, German Coalition Talks Back on

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MUST READS FROM WSJ CITY

The UK and the European Union have reached an agreement on Brexit divorce terms after six months of tense talks, opening the way for negotiations to advance to discuss a future trade agreement between the two. The pound rose 0.5% against the euro and 0.2% versus the dollar.

This week’s row over the Irish border marks a significant moment in the progress of Brexit: It is the first time since the referendum that the British political system has been forced to confront a genuine trade-off,  writes WSJ's chief European commentator Simon Nixon.

Germany moved a small step closer to a potential solution to its political crisis on Thursday after the country’s largest opposition party said it would enter talks with Chancellor Angela Merkel’s conservatives over forging a new government.

The US Labor Department releases its November employment report on Friday. Economists surveyed by The Wall Street Journal predict employers added 195,000 jobs last month and see the unemployment rate holding steady at 4.1%.

As investors rush into bitcoin, some big Wall Street banks are hitting the brakes. JPMorgan Chase, Bank of America Merrill Lynch, Citigroup and Royal Bank of Canada are telling customers that they won’t offer them access to the first bitcoin futures market when it goes live on Sunday, people familiar with the matter said.

There are plenty of reasons to wonder about the longevity of the equity bull market, writes Richard Barley for WSJ Heard on the Street.  But there is also a niggling question out there: what if stocks just keep going up?

A summary of markets this year requires only two words: Low volatility. For stocks, 2017 has been one of the least choppy years in history. A spike in inflation could change that.

Saudi Arabia’s Crown Prince Mohammed bin Salman, who is leading an austerity drive at home, is the bidder who paid a record $450.3 million for a Leonardo da Vinci portrait of Jesus Christ, settling one of the art world’s biggest mysteries.

IN THE PAPERS

The House and Senate passed a two-week stop-gap spending bill, deferring until later in the month a bigger fight over what issues should be resolved before Congress adjourns for the year. WSJ

Global finance officials have agreed on long-awaited banking rules that reach a compromise between opposing European and US views about how to measure the riskiness of lenders. WSJ

Research from the Bank of England has revealed that Britain is not reliant on foreign investors to fund its current account gap, seemingly contradicting Mark Carney’s explanation of how the UK funds its lifestyle. FT (£)

Bitcoin mania reached new highs Thursday as the price of the digital currency jumped about 40% in 40 hours, smashing through five separate $1,000-barriers and surging above $19,000 on some exchanges, before quickly retreating. WSJ

MARKETS TODAY

European stocks rose at the open on Friday, buoyed by a breakthrough on Brexit and hopes for a solution to the political impasse in Germany.

The Stoxx Euro 600 index was recently up 0.8% while London's FTSE 100 was flat, as the pound rose.

Property developer Berkeley led the UK index higher, gaining more than 8% after announcing a 36% rise in pretax profits in the first half of the financial year. Major banks and miners were also faring well in early trading, though oil and gas firms lost ground.

Germany's Dax jumped 0.9%, outperforming other regional benchmarks, after the Social Democrats agreed to enter talks with Chancellor Angela Merkel's conservatives over forging a new government.

COMING UP

US employment report

UK short term output indicators

Bank of England’s inflation attitudes survey