| A historic trade deal. Biden advisers rule out lockdown. Trump refuses to concede in flurry of tweets. Asia-Pacific nations including China, Japan and South Korea on Sunday signed the world's largest regional free-trade agreement, encompassing nearly a third of the world's population and gross domestic product. Top officials from 15 nations that also include Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations — but not India — inked the RCEP (Regional Comprehensive Economic Partnership) on the final day of the 37th Asean Summit. Supporters of the trade pact, which covers 2.2 billion people with a combined GDP of $26.2 trillion, said it will reduce tariffs, strengthen supply chains with common rules of origin, and codify new e-commerce rules. Here's what you need to know about the new pact. The yen slipped at the start of the trading week, while Asian stocks were poised to gain. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs, while the Dow Jones Industrial Average rose to pre-pandemic levels. The tech-heavy Nasdaq 100 underperformed major gauges amid the rotation to economically sensitive industries. Ten-year Treasury yields ended last week at 0.9%. The pound dipped as barriers remain to reaching a trade deal in Brexit talks. Global stocks have recovered to their pre-pandemic highs after optimism about a vaccine last week drove a rotation into value and cyclical sectors, whereas more defensive industries underperformed. Still, concerns about a sustainable economic recovery persist amid a flare-up in cases around the world. Two of President-elect Joe Biden's coronavirus advisers said they favor targeted local measures to stem the pandemic rather than a nationwide U.S. lockdown. Vivek Murthy, a former U.S. surgeon general who is one of Biden's top three advisers on the virus, said that the preferred approach to fighting it is "a dial that we turn up and down, depending on severity." Finding ways to curb Covid-19 infections is increasingly urgent for Biden after U.S. cases hit records over the past two weeks. As the U.S. nears 11 million infections, here's how Bloomberg is tracking the virus. Donald Trump showed few signs of conceding the presidential election to Joe Biden for a week after the race was called, while also hardly acting as if he was preparing for a second term. On Sunday the president appeared, almost as an aside in his ninth Twitter post of the morning, to have found a way to recognize defeat and claim victory at the same time. "He won because the Election was Rigged," Trump tweeted, a post that was flagged by Twitter for containing disputed claims of election fraud. An hour later, while in a motorcade heading to his golf course in Virginia, Trump recanted, saying "I concede NOTHING! We have a long way to go." Peru's interim president, Manuel Merino, is resigning just six days after the impeachment of his predecessor plunged the South American nation into turmoil. The surprise impeachment of Martin Vizcarra over unproven bribery allegations triggered Peru's biggest demonstrations in two decades. The political upheaval could cloud prospects for elections due in April, and further hamstring an economy that contracted 30% in the second quarter because of the Covid-19 pandemic. What We've Been ReadingThis is what's caught our eye over the past 24 hours: And finally, here's what Tracy's interested in todayWell that was fast. The average yield on U.S. junk bonds fell to a record low of 4.56% last week, as measured by the Bloomberg Barclays U.S. corporate high yield index. Risk premiums on high-yield bonds are now so low that analysts at Citigroup are suggesting investors switch out of junk bonds when "yields are gone" and buy leveraged loans instead. Their argument is partly based on the assumption that we won't see the kind of credit rating downgrades that had knocked out some of the appetite for leveraged loans earlier in the year. "This headwind is receding and we expect positive vaccine news will partially alleviate the pressure on agencies to preemptively cut ratings as they did during the spring," analysts Michael Anderson and Philip Dobrinov wrote in their note.  March's market turmoil had of course sparked a slew of downgrades by credit rating agencies as they rushed to incorporate economic stress from Covid-19 into their evaluations of corporate creditworthiness. Just eight months later, things look pretty different: Many agencies are hitting the pause button and reversing some of their previous decisions. Even while the economic damage wrought by Covid-19 lockdowns is still playing out, the credit market seems to have compressed an entire cycle (as well as spreads) — going from disaster to froth in less than a year. You can follow Tracy Alloway on Twitter at @tracyalloway. | 
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