Morning Report – Tuesday 15th December

Main Headlines

The US started administering the Pfizer/BioNTech vaccine yesterday with an intensive care nurse in New York the first to receive the shot. This comes as the US total death toll passed 300,000, and Donald Trump delayed a plan for White House staffers to get the vaccine.

Michael Gove confirmed that London would be entering “Tier 3” lockdown from Wednesday with no end date set. This delivers another blow to the hospitality sector, although strangely the capital will come out of the harsh restrictions for 5 days during Christmas, then go back into Tier 3 on the 28th December.

GBP

The pound is mostly unchanged against both the euro and dollar in trading this morning. Michel Barnier said there was a “narrow path” to a trade deal and officials close to negotiations believe that Johnson could compromise on UK fisheries to secure a good deal on UK sovereignty. The unemployment rate for October came in at 4.9% below the expected 5.1%, which is positive news, but is now obsolete due to the introduction of the lockdown and tiered restrictions in November and December has fully shaken up the jobs market.

EUR

The euro is mostly unchanged against the dollar in early morning trading today. Netherlands and Czech Republic joined Germany and other European countries by increasing restrictions over the festive period as cases in the continent are gathering pace. France and Italy are also set to release CPI for November, which will likely be maintained at a very low level.

USD

The dollar is mostly unchanged against a set of major currencies including the Japanese Yen. Today is set to be a busy day in the US, with senators debating a relatively small $748 billion relief package to pass something before the new year, although Democrats hope this will expand to the original $908 billion bill. The Fed is also set to start the FOMC meeting today to deliver a rate decision by tomorrow. The consensus is for there to be no change in policy. In other news, the Electoral College voted Joe Biden as the next US President, but don’t expect an official concession from Donald Trump just yet.

Markets

Global equities are mixed this morning, as optimism over the vaccine in the US gave way to concerns that Senators would not pass a substantial fiscal stimulus bill by the end of the year. New York City Mayor Bill de Blasio’s assertion that people should be prepared for another full-scale lockdown also worried investors. As a result, bond yields have fallen slightly while Oil prices retreated below record highs.

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

7:00 a.m.: U.K. Oct. Unemployment
7:45 a.m.: France Nov. CPI
9:00 a.m.: Italy Nov. CPI
10:00 a.m.: Italy Oct. Trade
1:00 p.m.: Hungary Rate Decision
4:00 p.m.: Russia Nov. Industrial Production

FOMC meeting starts
IEA’s monthly Oil Market Report
EU unveils Digital Markets Act