Morning Report – Tuesday 12th January

Main Headlines

House Democrats introduced an article of impeachment against Donald Trump for the second time of his presidency, levelling the unprecedented charge of inciting an insurrection. The vote was not unanimous, so will be debated by the House today and a vote could come as early as Wednesday.

Conservative MPs have urged Boris Johnson to set 8th March as the deadline for lifting Coronavirus restrictions after ministers insisted that 15 million people will be vaccinated by mid-February. However Boris Johnson is concerned about “false complacency” about current restrictions due to the successful ongoing vaccine programme.

GBP

The pound is higher against the dollar and euro in trading this morning. UK retail sales for December were the worst on record as the festive period was hit by the cancellation of Christmas plans and tighter restrictions in the hospitality sector. BoE policymaker Tenreyro also scared investors by confirming it was still possible for interest rates to slip into negative territory.

EUR

The euro is mostly unchanged against the dollar in early morning trading today. It is a quiet day in the Eurozone as there are no major economic data releases, Angela Merkel has spoken against Twitter’s decision to ban Donald Trump calling it a “problematic” breach of the right to free speech.

USD

The dollar is mostly unchanged against a set of major currencies including the Japanese Yen. Federal Reserve officials said that more fiscal support and the mass distribution of vaccines could lead to a strong second half of the year, and may even lead to a reduction in bond buying. The day ahead includes November’s JOLTS job openings report.

Markets

Global equities edge higher this morning after stocks in Wall Street finished yesterday lower for the first time in five days. Treasury yields are at their highest level since March and have increased significantly over the last few weeks, and so investors are assessing potential risks in the current environment. Gold and Oil prices also continued to tick higher.

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

10:00 a.m.: BOE’s Broadbent speaks
4:00 p.m.: Russia Dec. CPI
5:00 p.m.: USDA WASDE Report
5:20 p.m.: ECB’s de Cos speaks

Our currency forecast for January is available now, and the outlook can be found here