Morning Report – Friday 8th January

Main Headlines

Democratic leaders have called on Mike Pence to invoke the 25th amendment of the Constitution and forcibly remove Donald Trump from office. Although it is unlikely Pence will actively seek to push Trump out of the White House, he is, along with other Republicans and senior aides, distancing himself from the President who has lost significant support since the violent attack on the US Capitol.

The UK will impose mandatory Covid-19 tests for incoming passengers and hand out fines for people with positive results. The US meanwhile had its deadliest day of the pandemic on Wednesday recording 4,000 deaths for the first time.

GBP

The pound is higher against both the euro and dollar in trading this morning. UK hauliers have been warned to expect tougher French custom controls in what could be the first serious border disruption since the Brexit transition period begun. The day is light on the economic data front so investors will be focused on the corresponding currency pair for direction.

EUR

The euro is lower against the dollar in early morning trading today. The EU has hit back at criticism that it has failed to secure enough vaccines as the bloc looks on to successful rollouts in the U.K. and US. Germany, Spain and France combined have only vaccinated just over half as many people as the U.K. Eurozone unemployment data will also be released this morning and should come in just above the 8.5% recorded in October.

USD

The dollar is mostly unchanged against a basket of major currencies and is higher against the Japanese Yen in trading this morning. The first US Jobs report of the year is released this afternoon and is expected to slow dramatically in December only adding 50,000 jobs in the month, the least since payrolls started to recover in May. The unemployment rate is also expected to rise for the first time in eight months to 6.8%.

Markets

Asian equities were boosted by the technology sector as the hopes for more stimulus boosted sentiment. S&P 500 futures are higher after closing yesterday at record highs, and Bitcoin also managed to surpass $40,000. Treasury yields edged lower while oil prices ticked higher.

Main Economic Data/Central Banks/Government (All times GMT)

7:00 a.m.: Germany Nov. Industrial Production, Trade
7:45 a.m.: France Nov. Industrial Production, Trade
10:00 a.m.: Euro-Area, Italy Nov. Unemployment
11:00 a.m.: U.K. sells bills
1:30 p.m.: U.S. Dec. Jobs Report
6:00 p.m.: U.S. Baker Hughes Rig Count