Morning Report – Wednesday 7 April
Jon Robson, Head of Trading
“The mood amongst market participants will be upbeat following the IMF’s upgraded forecast yesterday. Policymakers increasingly see an end in sight, encouraged by the progress of vaccine rollouts worldwide and the impact of fiscal stimulus support. This should lead to another round of selling in safe haven currencies.”
President Biden has announced that all US adults will be eligible for Covid-19 vaccines by April 19, accelerating the previous timeline while urging patience as the vaccination rollout progresses and variants continue to spread. Biden has overseen 150m doses in his first 75 days in office and the inoculation campaign continues at pace with the US now administering around 3 million doses a day. About 40% of the US adults have received at lease one shot.
The UK is set to begin the roll out of the Moderna vaccine today, two weeks earlier than anticipated, with the third vaccine approved in Britain becoming available in Wales. The UK has ordered 17 million doses of the Moderna vaccine, sufficient to inoculate 8.5 million people. Meanwhile, a trial of the AstraZeneca vaccine in children has been paused while regulators investigate a possible link to rare blood clots.
Sterling is weaker against most majors overnight. The CEOs of British Airways, Virgin Atlantic and Heathrow has issued a rare joint plea to the Government urging Prime Minister Boris Johnson to open a travel corridor with the US as soon as next month. The call comes amid pressure from airlines to restart lucrative travel routes after over 12 months of disruption and uncertainty over the resumption of international travel in May.
The euro is largely unchanged against the dollar and higher versus the pound in the early morning trade. In spite of lingering doubts concerning the AstraZeneca vaccine, the European Commission has informed member states that it expects to have sufficient vaccine supplies to immunise the majority of people by the end of June. Elsewhere, Merkel has backed potential heir and Chairman of the CDU, Armin Laschet’s plans for a short, strict lockdown of two to three weeks as Germany continues to grapple with a third wave and resurgent infections. German politicians, however, remain reluctant to impose new restrictions ahead of national elections in September.
The dollar is stronger against sterling and steady against the euro this morning. The US job market is creating more opportunities than previously anticipated by experts with non-farm payrolls growing by 916,000 last month, far exceeding the consensus of a 660,000 gain. State officials in California have announced plans to lift the majority of coronavirus restrictions by 15 June if hospitalisations remain low and stable.
Global stocks traded around all-time highs Wednesday as investors weighed the economic rebound from the pandemic and stimulus support. A gauge of Asia-Pacific equities fluctuated, as did U.S. and European futures. Chinese stocks underperformed while Japan advanced. The S&P 500 and Nasdaq 100 retreated overnight as volume on U.S. exchanges slipped below 10 billion shares. Oil held above $59 a barrel amid optimism that economic expansion will pick up. The International Monetary Fund upgraded its global growth forecast while warning about a divergence between advanced and less-developed economies.
Main Economic Data/Central Banks/Government (All Times CET)
9:15 a.m.: Spain March Services, Composite PMI
9:45 a.m.: Italy March Services, Composite PMI
9:50 a.m.: France March Services, Composite PMI
9:55 a.m.: Germany March Services, Composite PMI
10:00 a.m.: Euro-Area March Services, Composite PMI
10:30 a.m.: U.K. March Services, Composite PMI
11:00 a.m.: U.K. sells bonds
11:30 a.m.: Germany sells bonds
12:30 p.m.: U.K. sells bonds
1:00 p.m.: Russia sells bonds
4:30 p.m.: EIA Crude Oil Inventory Report
8:00 p.m.: FOMC Minutes
Poland rate decision
Earnings include Carnival