European Market Open: Higher start as tensions over vaccine supplies ease

European markets are expected to open higher today following the heavy selloff last week.

Uptrend 2

  • Tensions over a shortage of vaccines in the EU eased over the weekend after AstraZeneca agreed to supply extra doses to the bloc before the end of March.
  • The UK will start the process of applying to join a trans-pacific trade bloc this week as part of its post-Brexit trade plans.
  • In commodities, silver has shot up in price as it is targeted by retail traders, helping send gold higher too.

FTSE 100 to open higher

The FTSE 100 is set to open 1.2% higher at 6427.0 after ending last week at 6348.3.

European markets to follow

France’s CAC 40 is set to open 1.4% higher at 5441.8 from 5368.0 at the end of play last week.

Germany’s DAX is called to open 1.1% higher at 13543.0 from 13402.0 at the last close.

Start trading the opportunities with indices today.

EU secures 9 million more doses of AstraZeneca vaccine

AstraZeneca will deliver nine million more doses of its coronavirus vaccine to the EU during the first quarter of 2021 and will ship jabs sooner than expected, according to the president of the European Commission Ursala von der Leyen.

That will mean AstraZeneca will deliver around 40 million doses before the end of March – just half the original 80-million-or-so that was originally agreed. Lower than expected yields has weighed on production and AstraZeneca warned in January that it wouldn’t be able to meet EU demand during the initial months of the year, raising tensions with the EU that is desperately playing catch up with its vaccination programme.

Notably, the EU only formally approved the AstraZeneca vaccine on Friday, making it the third to be given the green light by the bloc alongside Pfizer-BioNTech and Moderna.

‘AstraZeneca will deliver 9 million additional doses in the first quarter (40 million in total) compared to last week’s offer and will start deliveries one week earlier than scheduled’, von der Leyen said on Twitter.

This comes after the EU considered triggering a controversial clause within the Brexit deal over the weekend that would have tried to prevent vaccines being exported out of the Republic of Ireland and into Northern Ireland, before quickly backtracking. The UK’s vaccine minister Nadhim Zahawi said the country is now aiming to collaborate with the EU on the rollout of vaccines as tensions died down.

UK prepares to apply to trans-pacific trade bloc

The UK will formally apply to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) this week.

The trading bloc contains 11 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – and is designed to remove tariffs on goods traded between the group.

The UK’s trade minister Liz Truss said she intends to file a letter of intent to join on Monday as the UK looks to strike its own trading arrangements around the world following Brexit.

Can Microsoft’s Bing replace Alphabet’s Google in Australia?

Australia is standing firm in its dispute with Google after prime minister Scott Morrison said Microsoft’s Bing search engine could act as a replacement if Alphabet follows through with its threat to remove Google.

The government has introduced laws that require Google and social media companies like Facebook to pay domestic media outlets for the news that appears on their sites and platforms. That has ruffled the feathers of Google, who has threatened to pull out of the country because the new laws would make its business ‘unworkable’. Google accounts for 94% of all the country’s web searches.

However, Microsoft has now held talks with the government and is reported to be ready to grow its Bing search engine under the new laws.

Myanmar military stage coup

The military of Myanmar has taken control of the country after detaining leader Aung San Suu Kyi and declaring a state of emergency that will last for a year whilst power is transferred. It comes after Suu Kyi’s National League for Democracy party won elections last November and has prompted people to source money, food and fuel as they try to prepare for what is still to come.

Forex: Narrow movements

EUR/GBP was trading at 0.88268 in early trade, down 0.3% from 0.88560 when markets closed on Friday.

Meanwhile, GBP/USD traded at 1.37415, up 0.3% from 1.37050 at the end of last week.

Analyst Fiona Cincotta looks at GBP/USD price movement here ahead of UK manufacturing PMI data later this morning.

EUR/USD was down 0.2% in early trade at 1.21294 from 1.21560 as markets came to a close last Friday.

Start trading the opportunities in the forex market today.

Commodities: Silver rally pushes up the price of gold

Brent traded at $55.37 a barrel this morning, up 0.5% from $55.08 when markets shut last week, while WTI followed to $52.40 from $52.15.

Start trading the volatility in oil markets today.

Gold traded at $1866.4 per ounce in early trade, 1.2% higher than $1844.7 at the end of play last week.

Notably, the rise in gold prices has been partly driven by a surge in silver prices as Reddit-enthused retail traders target the metal as their next target. Data from BlackRock showed the world’s largest silver-back ETF, the iShares Silver Trust, saw almost $1 billion of inflow on Friday, according to the Financial Times.

Silver prices were trading at $28.84 an ounce this morning – its highest level since August - after ending Friday at $26.93. The price jumped 4.5% on Thursday and a further 4.8% on Friday.

Analyst Fiona Cincotta looks at the price movement of silver in light of its spike higher here.

Start trading the opportunities in the gold and silver market today.

Market-moving events in the economic calendar

Manufacturing PMIs dominate the economic calendar today, with Spain to release data at 0815 GMT and followed by Italy at 0845 GMT, France at 0850 GMT, Germany at 0855 GMT and then the eurozone as a whole at 0900 GMT. The UK PMI will come out at 0930 GMT

Italian unemployment figures will be released at 0900 GMT followed by eurozone unemployment figures at 1000 GMT.

This afternoon sees Canada’s manufacturing PMI out at 1430 GMT. The US has both the Markit manufacturing PMI out at 1445 GMT and the ISM manufacturing PMI at 1500 GMT. Eric Rosengren, the head of the Federal Reserve Bank of Boston, will make a speech at 1910 GMT. analyst Joe Perry has a look at what to expect over the coming days in the Week Ahead.

Look at all the scheduled events for today using our economic calendar, and stay up to date with the latest news and analysis here.

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