The FTSE is kicking off the week on the front foot as vaccine optimism overshadows the grim backdrop of accelerating covid cases. The light at the end of the tunnel appears to be getting brighter.
AstraZeneca announced that its vaccine candidate developed with the University of Oxford is around 70% effective. Whilst normally this would be an excellent result, the fact that it comes after Moderna and Pfizer claiming 95% effectiveness has certainly taken the shine off the announcement. However, on the plus side, the AstraZeneca jab is far cheaper and easier to store than the other two.
Adding to the upbeat mood in the UK, the government confirmed that lockdown will end on 2nd December and the UK will move to a 4 Tier system. This should provide a massive boost to the high street retailers which have been a clear victim of the covid pandemic. Shops, along with bars, restaurants and gyms reopening in all areas of the UK in time for the key Christmas trading period means that the UK economy will once again be able to move forward on its recovery path.
PMIs in focus
Looking ahead manufacturing & services PMIs for the Eurozone, the UK and the US will be in focus. Preliminary readings for November business activity in the Eurozone are expected to be dismal owing the resurgence of covid and second round of lockdown restrictions. Last months’ readings showed a slight decrease, this month’s readings are expected to show a significant deterioration in activity level.
UK manufacturing and services PMI will also be in focus, The UK economy has proved to be resilient, strengthening after the March / April lockdown. However, this strength eased slightly in October as fresh lockdown restrictions in part of the UK came into force. November’s data is expected to show a continued weakening in November reflecting the fallout from the national lockdown across the UK which started on 5th November.