Morning Report – Monday 11th January

Jon Robson, Head of Trading

“We have seen a small rebound in the dollar as a result of uncertainty surrounding further coronavirus restrictions across the globe. We expect this to be short lived given the global push to administer vaccines and recent lows should be tested in the short term.”

Main Headlines

Democrats in the House of Representatives look to be going ahead with their threat to introduce articles of impeachment against Donald Trump later today. Congressional aides have reportedly gathered over 170 signatures of support, while Republicans have been noticeably quiet.

Matt Hancock said that 2 million vaccines had already been administered, including to a third of people aged over 80. Boris Johnson also wants to increase the number of vaccination “mega-centres”, which are set to increase seven fold over the coming weeks under plans drawn up by the Government.

GBP

The pound is lower against both the dollar and euro in trading this morning. This is likely due to reports that the Government is considering tightening lockdown restrictions which will weigh on the pound, and means that the UK’s disastrous start to 2021 could get worse.

EUR

The euro is lower against the dollar in early morning trading today. The EU Parliament will start to debate the Brexit deal today, but ratification is expected to be a formality. ECB President Christine Lagarde will moderate a panel today, but it is unlikely she will drop any hints about the upcoming Central Bank meeting, so investors are advised to steer clear.

USD

The dollar is higher against a set of major currencies including the Japanese Yen in trading this morning. The dollar has benefitted from political uncertainty caused by the fallout from the Capitol Hill attack last Wednesday as well as increasing Coronavirus restrictions globally. According to insider sources, Donald Trump is planning a defiant final week in Office, which could increase already heightened tensions.

Markets

Global equities are down as stocks are taking a pause from a record high in the S&P 500 seen last Friday and also investors are waiting out increased political uncertainty which could lead to an impeachment trial later today. Biden said on Friday that he’ll lay out proposals for “trillions of dollars” in fiscal support and so it is likely that global equities will trend upwards this week as a result of that news.

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

8:00 a.m.: Turkey Oct. Unemployment, Nov. Current Account
9:00 a.m.: Spain Nov. Industrial Production
11:00 a.m.: ECB’s Vasle speaks
3:40 p.m.: ECB’s Lagarde moderates panel