European Market Open: Global coronavirus cases surpass 90 million
January 12, 2021 7:26 AM
European markets are expected to bounce back this morning after a tough start to the week, as global coronavirus cases surge and prompt countries to take tougher action to stop the spread.
- European markets are called to open higher this morning after starting the week under pressure.
- Global coronavirus cases have now surpassed 90 million and the death toll now stands at over 1.9 million, as several countries tighten restrictions to stop the spread.
- US Democrats are vowing to start impeachment proceedings against president Trump on Wednesday.
- In commodities, both oil and gold have recovered some of the ground lost yesterday.
FTSE 100 to edge higher
The FTSE 100 is set to open 0.2% higher at 6810.0 after closing yesterday at 6795.1.
European markets to start higher
France’s CAC 40 is called to open at 5672.9, up 0.2% after ending yesterday at 5663.8.
Germany’s DAX is set to open 0.2% higher at 13965.5 from its last closing price of 13938.2.
Coronavirus update: Global cases surpass 90 million
A Reuters tally suggests global cases of coronavirus have now exceeded 90 million, with over 1.9 million deaths. The US, UK and Brazil are the three worst-affected countries in the world.
Here are the latest updates on the coronavirus crisis from around the world.
The UK is not expected to introduce tighter coronavirus restrictions in the short-term, according to the BBC. Reports suggested the government was considering introducing new rules, such as making face masks mandatory outside or limiting the ability to exercise outside, ahead of a press conference yesterday. Health secretary Matt Hancock stressed the need for people to follow the rules but did not unveil any new restrictions. However, chief of the Metropolitan Police Cressida Dick warned people are ‘increasingly likely’ to be fined for breaking lockdown rules. The UK reported over 46,000 cases on Monday and a further 529 deaths.
French prime minister Jean Castex warned a new national lockdown should not be ruled out.
Elsewhere, reports have surfaced that Japan will expand its state of emergency from covering Tokyo to cover Osaka, Kyoto and Hyogo. The state of emergency is due to run until February 7. This is expected to come into force on Wednesday, and it could end up including other areas of the country too.
Meanwhile, China introduced tougher rules in the Hebei province after placing the area in lockdown last week to prevent a spike in cases from getting out of control. The new rules are expected to apply to another 5 million people in the city of Langfang.
Malaysia has declared a state of emergency after the king agreed to the government’s request to introduce emergency measures as hospitals come under strain.
In terms of vaccinations, US authorities said nearly 9 million citizens have now been vaccinated. That implies a slow start for the campaign considering 25 million doses have been distributed so far. Still, activity should ramp-up following the US approval of the Moderna vaccine.
India is also set to start its mass vaccination programme shortly, with president Narendra Modi stating it was his government’s top priority.
UK retail sales in 2020 are worst on record
Retail sales suffered more in 2020 than ever before as shops were shuttered during lockdowns. The British Retail Consortium said this morning that retail sales dropped 0.3% in the year and claimed it was the worst performance since it started collecting records in 1995.
Although there was a 5.4% rise in food sales, demand for non-food items like clothing and homeware plunged by 5%.
US Democrats plan to impeach Trump on Wednesday
Democrats in the US intend to impeach president Donald Trump on Wednesday if he has not stepped down or been removed from office. The party warned it would push ahead with impeachment proceedings if vice-president Mike Pence does not remove the president using the 25th amendment.
More Republicans have called for Trump to resign following the turmoil last week when rioters stormed the US Capitol building, but they are reluctant to oust him in his final days in office ahead of Joe Biden being inaugurated on January 20. Still, an impeachment would unlikely be wrapped-up before then, with Democrats arguing Trump still needs to be held to account for his role in the ‘incitement of insurrection’. The Democrats also hope an impeachment could prevent Trump from running for president in 2024.
Corporate America makes feelings known to Republicans
The Republican party is also starting to come under pressure from big business that have threatened to cut-off funding and donations to the party in wake of the tumultuous events of last week.
Amazon, General Election, AT&T, Verizon, American Express, Cisco, Mastercard and Comcast are just some of the giants to release statements that revealed they were withholding donations or considering cutting-off funding. The primary problem for most of them is with Republicans that refused to certify Joe Biden’s election win, but last week’s turmoil at the US Capitol building has not helped.
Forex: Cable up 0.3%
GBP/USD traded at 1.35547 this morning, up 0.3% after ending Monday at 1.35150.
Meanwhile, EUR/GBP traded 0.2% higher at 0.89721 from its last closing price of 0.89888.
Commodities: Oil and gold rise
Brent traded at $55.89 this morning, up 0.5% from $55.60 at the close yesterday, while WTI followed higher to $52.54 from $52.22.
WTI will be in focus later when the US API weekly crude oil stocks change, providing an insight into US demand, is released at 2130 GMT.
Gold traded at $1860 per ounce this morning, 0.9% higher after ending yesterday at $1843.
Market-moving events in the economic calendar
Central banks take centre stage today in an otherwise light economic calendar. The Bank of England’s Ben Broadbent is to give a speech at 1000 GMT, with the US Federal Reserve’s Lael Brainard to give his own speech at 1435 GMT followed by Eric Rosengren at 1900 GMT.
US JOLTS job openings will be published at 1500 GMT, alongside the economic optimism index.
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