Morning Report – Wednesday 13th January

Jon Robson, Head of Trading

“As expected, the small rebound in the dollar has been short lived and it is again under pressure as global asset prices are well supported.”

Main Headlines

Boris Johnson has reportedly clashed with senior NHS officials over the pace of the Covid-19 vaccine. Johnson is frustrated by excessive bureaucracy surrounding the vaccines and he has approved a pilot for a vaccination centre that will be open 24 hours a day. The U.K. continues to struggle with the virus, however is currently vaccinating more people per capita than any other country in Europe.

Vice President Mike Pence has ruled out invoking the 25th amendment to remove Donald Trump from office. This comes as Liz Cheney, a high ranking Republican Congresswoman said she would vote to impeach Trump, breaking with other Republicans but this will have little effect on whether impeachment goes ahead as the House already has the votes.

GBP

The pound is higher against both the euro and dollar in trading this morning. The UK now has more people on ventilators than in April’s peak, prompting the Government to call on the public to adhere to lockdown rules or they may be forced to increase restrictions further. This is to the dismay of Conservative MP’s who are pushing for a relaxing in restrictions to help the flagging economy.

EUR

The euro is mostly unchanged against the dollar in early morning trading today. Data for Eurozone industrial production is released this morning and will likely show that growth probably slowed to 0.2% in November from about 2.1% previously due to lockdowns in most major European economies at that time. Italy’s Government could also be heading for collapse as a junior ally renewed his threat to abandon the coalition.

USD

The dollar is slightly lower against a set of major currencies including the Japanese Yen. Fed officials have downplayed the idea that they will look to cut asset purchases this year. Eric Rosengren said that the bond buying will continue until the economy is on solid footing, which could be a while yet. US inflation data is also released this afternoon, which is expected to increase by 1.3% year-on-year.

Markets

S&P 500 futures edged higher while Asian equities climbed towards another record high. The vaccine rollout and prospect of more US fiscal stimulus continues to aid stocks despite the political noise coming out of Capitol Hill, although treasury yields retreated as investors weighed up comments made by Federal reserve officials.

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

7:00 a.m.: Germany Dec. Wholesale Price Index
7:00 a.m.: Turkey Nov. Industrial Production
8:30 a.m.: ECB’s Villeroy speaks
9:00 a.m.: ECB’s Lagarde participates in Q&A
9:00 a.m.: Italy Nov. Industrial Production
10:00 a.m.: Euro-Area Nov. Industrial Production
11:00 a.m.: Israel Dec. Trade Balance
1:30 p.m.: U.S. Dec. CPI
3:30 p.m.: EIA Crude Oil Inventory Report

Poland Rate Decision
U.K.’s Johnson due to appear before Parliament’s Liaison Committee
Gulf Intelligence ‘Global’ UAE Energy Forum