Morning Report – Tuesday 22nd December

Main Headlines

More than 40 countries have shut borders with the UK after a new Coronavirus strain was discovered. Urgent talks were held between London and Paris to end a channel trade shutdown. Prime Minister Johnson said that the shutdown had affected 20% of food supplies coming from the continent.

EU medicines regulator approved the Pfizer/ BioNTech Covid-19 vaccine yesterday, and it is set to be administered across the 27 member bloc within days. Emer Cooke, the European Medicines Agency Executive Director said that authorising the vaccine was a “major step in the right direction”.

GBP

The pound is unchanged against the dollar and higher against the euro in trading this morning. The UK is still confident that a Brexit deal could take place, as Government officials are reportedly willing to give further ground on fisheries if the EU backs down in other areas. There have been recent calls to postpone Brexit negotiations amid the worsening pandemic.

EUR

The euro is lower against the dollar in early morning trading today. The day is light on economic data, although ECB speaker Mario Centeno is set to speak today.

USD

The dollar is mostly unchanged against a set of major currencies including the Japanese Yen in early morning trading today. The US House and Senate finally passed the $900 billion stimulus bill, which will now be ratified by Donald Trump. This has made little impact on markets given the worsening impact of the pandemic.

Markets

Global equities are falling due to the escalating Covid-19 outbreak and an increase in extra restrictions and lockdowns across the world. S&P 500 futures have pulled back this week after hitting record highs last week. Oil prices and bond yields have also fallen.

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

7:00 a.m.: U.K. 3Q GDP, Nov. Public Finances
7:00 a.m.: Germany Jan. Consumer Confidence
9:30 a.m.: ECB’s Mario Centeno speaks
1:30 p.m.: U.S. 3Q GDP

American Enterprise Institute holds ‘Are the world’s central banks running out of road?’ event