- UK has vaccinated 15 million people, most of which are in the top four priority groups.
- Mario Draghi sworn in as the new prime minister of Italy.
- Japanese stocks surge higher despite the country’s GDP plunging 4.8% in 2020.
- Former US president Donald Trump is acquitted in his impeachment trial.
- In commodities, rising tensions in the Middle East provided further support to oil prices.
- The economic calendar is quiet today, with US markets closed for President’s Day.
FTSE 100 to see positive start to the week
The FTSE 100 is set to open 0.4% higher this morning at 6639.8.
European markets to follow higher
France’s CAC 40 is set to open 0.6% higher today at 5743.6.
Germany’s DAX is called to open 0.5% higher this morning at 14153.0.
UK completes first phase of vaccination programme
The UK has met its ambition to vaccinate all people within the top four priority groups of people by mid-February, with over 15 million having received their first jab.
This means that all elderly people, care home workers, frontline health workers, social care workers, and people who are vulnerable because of disease have been offered a jab. The programme will now move onto people aged 65 and over and younger people deemed at higher risk.
The achievement comes ahead of prime minister Boris Johnson outlining the UK’s plan to exit lockdown on February 22, with expectations that he will start by reopening schools from March 8 before gradually easing restrictions thereafter. A group of 60 Conservative backbenchers are calling for all lockdown restrictions to be eased by the end of April.
UK introduces quarantine hotel measures
The UK’s quarantine hotel measures will be enforced from today, forcing people arriving in England from high-risk countries to quarantine in government-approved hotels for a period of 10 days and at a cost of around £1,750. People face fines of up to £10,000 or even a jail sentence if they fail to comply.
Notably, reports suggest only 16 hotels have signed-up so far and Heathrow Airport warned that ‘significant gaps’ remained in the system. People arriving from non-high-risk countries will still have to quarantine but can do so in their own properties.
Mario Draghi sworn in as prime minister of Italy
Former boss of the European Central Bank, Mario Draghi, has been sworn in as the new prime minister of Italy to lead a coalition government and steer the country through the pandemic and economic recovery.
He has secured widespread support from parliament, with the centre-right League, the anti-establishment 5-Star Movement and other parties all providing Draghi with their backing. Draghi has said his cabinet will be made up a of a broad range of opinions in a proposal on Friday.
The new government will face a vote of confidence in both houses of parliament on Monday and Tuesday.
Former US president Donald Trump acquitted
Donald Trump has been found not guilty in his impeachment trial after Democrats failed to convince enough Republicans to turn on the former US president. The 100-seat Senate voted 57 as ‘guilty’ and 43 as ‘not guilty’, below the two-thirds majority needed to secure a conviction.
Trump hinted he could return to the political stage following the judgement, reiterating his promise that ‘our historic, patriotic and beautiful movement to Make America Great Again has only just begun’.
Japan’s economy contracts 4.8% in 2020
The Japanese economy suffered its first contraction since the financial crisis in 2020 as the pandemic bit, with GDP shrinking 4.8%.
The economy surged in the final three months of the year to beat expectations of 3% growth. Although welcome, that was markedly slower than the 5.3% growth reported in the third quarter.
The news helped propel the Nikkei to hit 30,000.0 for the first time since 1990, which has also gained momentum from the start of the country’s vaccination programme.
Markets in China and Hong Kong are shut for the Lunar New Year holiday today.
Ngozi Okonjo-Iweala to lead World Trade Organisation
The World Trade Organisation, or WTO, is set to appoint Nigeria’s Ngozi Okonjo-Iweala as its leader later today, marking the first time a female and/or an African has run the international organisation.
The WTO has been without a leader for around six months after the US vetoed against the WTO’s proposals for a new leader while Donald Trump was in the White House.
Forex: EUR/GBP sinks to lowest level since May 2020
EUR/GBP was down 0.1% in early trade this morning at 0.87361 – its lowest level since May 2020.
GBP/USD was up 0.3% from Friday’s close this morning at 1.38913.
Meanwhile, EUR/USD was trading up 0.1% this morning at 1.21354.
Commodities: Tensions in Middle East push oil prices higher
Oil prices have continued to rally and hit their highest level since January 2020 as vaccination programmes accelerate and governments and central banks look committed to providing support in the meantime.
Reuters reported that prices were also benefitting from news that a coalition of fighting forces in Yemen being led by Saudi Arabia intercepted a drone controlled by the Houthis that are aligned with Iran, sparking concerns that tensions could rise in the oil rich Middle East.
Brent was trading 1.4% higher in early trade at $63.35 a barrel, while WTI followed higher to $60.65. Both are trading at their highest level since January 2020.
Silver was up 0.4% at $27.42 an ounce.
The economic calendar is light today, with US markets closed for President’s Day. There is a Eurogroup meeting being held today to discuss the macroeconomic developments and policy prospects in the euro area. There is eurozone industrial production at 1000 GMT.
You can find out more about what to expect in the coming days by reading our Week Ahead.