That good feeling is back in the markets after we saw some end of month profit-taking on Monday, with Europe seeing gains of more than 1% and Wall Street eyeing a similar open.

The last month was massive for the markets. One major risk event removed and three vaccines that allow everyone to imagine life after Covid. The optimism fizzled out a little into the end of the month but importantly, there was no major correction of the early November surge. This wasn’t a rally gone too far, just one in need of a rest.

Whether that optimism can continue into the end of the year is another thing. A lot of good news is now priced in and many countries are navigating through a complex second wave of Covid-19, some with more success than others. Operation Save Christmas – and obviously ease rapidly growing pressure on health systems – appears to be working, although many regions will continue to see pretty harsh restrictions.

The US Thanksgiving holiday may offer some insight into the kinds of surges we can expect over the holiday period and people travel around and spend time with family. January and February may be very challenging once again, although it will be made slightly easier by the knowledge that we’re almost at the finish line. And should vaccination programs be successful, less pressure on health systems may mean less strict measures. Here’s hoping!

This morning has seen a flurry of tier three data from across Europe, with the manufacturing PMIs the most notable of these. The strong performance in manufacturing compared to services has been a positive this last month but it remains a much smaller component of the economy, particularly in the UK, so the overall benefit is small.

The UK manufacturing PMI may also have painted a slightly false picture, with a certain amount of the increase coming from stockpiling as the country prepares to leave the transition period, perhaps without a deal meaning trade friction and tariffs in the near-term. Still, the sector has had a much better lockdown this time around across Europe, with it facing fewer restrictions than earlier this year.

The euro area PMI is still looking good, although outside of Germany we are seeing some softening in the data. As ever, Germany is the star pupil having managed the pandemic well to date and the data is continuing to reap the rewards. The country may not quite be seeing the turnaround yet that others are but it has also been far less impacted. Unemployment ticked lower in another encouraging sign for the region’s largest economy.

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/