European Market Open: Trump is impeached

• European markets are called to open higher today after coming under pressure earlier in the week.
• The UK is aiming to run a 24/7 vaccination programme as medical professionals warn the latest wave of the virus has been more deadly than the first.
• The US remains centre stage today after president Trump was impeached for a second-time yesterday and ahead of president-elect Biden’s speech later today.
• In forex, the dollar is in focus ahead of Biden’s speech and an update from US Federal Reserve chair Jerome Powell, while EUR/GBP has sunk to its lowest level since November.
• In commodities, oil prices continue to take a breather from the recent rally.

FTSE 100 to open 0.3% higher

The FTSE 100 is set to open 0.3% higher today at 6770.5 after ending yesterday at 6749.3.

European markets eye higher ground

The Euro STOXX Index is to open 0.3% higher at 3629.5 this morning from 3619.3 at the close of trade on Wednesday.

France’s CAC 40 is called to open 0.4% higher at 5686.0 after ending yesterday at 5666.0.

Germany’s DAX is set to open 0.3% higher at 13997.5 from 13957.5 at the last close.

Start trading the opportunities with indices today.

UK targets 24/7 vaccinations as latest wave proves more deadly

The UK is hoping to vaccinate people 24 hours a day, 7 days a week as deaths reached a new daily high on Wednesday.

A total of 1564 people died within 28 days of a positive coronavirus test yesterday. Yvonne Doyle, the medical director for Public Health England, said ‘today we have reported the highest number of deaths on a single day since the pandemic began’.

‘There have now been more deaths in the second wave than the first,’ she added.

As the new variant continues to cause chaos, prime minister Boris Johnson said he wants 24/7 vaccinations taking place as quickly as possible. Right now, it is not possible because there are constraints on supply, but the arrival of 2 million AstraZeneca doses a week from around mid-February is expected to bolster supplies.

The country is hoping to vaccinate 2 million people per week to allow all vulnerable people to be protected by mid-February and so ‘all adults’ can be offered a jab by the Autumn. Pharmacies are expected to start administering vaccines from today, including major high street brands like Superdrug and Boots.

‘Mechanical, obvious, inevitable consequences’ for UK post-Brexit

Michel Barnier, who led the EU’s negotiating team during Brexit talks, has warned that there will be friction at the UK-EU border as a result of a Brexit.

Barnier said ‘there are mechanical, obvious, inevitable, consequences when you leave the single market and that’s what the British wished to do’. He said that while many businesses will eventually overcome the changes that came into force at the start of the year, there will be structural changes that both sides will have to adapt to. He warned the agreement ‘will not be renegotiated’ and said it ‘now needs to be implemented’.

Trump becomes first president to be impeached twice

Donald Trump has become the first US president to be impeached twice after 10 Republicans partnered with the Democrats to decide he had incited violence ahead of the violent scenes at the US Capitol building last week.

The House of Representatives voted 232-197 in favour of the article of impeachment that represents a formal charge against the president for ‘incitement of insurrection’.

The impeachment is unlikely to remove Trump from office before January 20, when Joe Biden is inaugurated, but Democrats are hoping the impeachment will hold him to account and possibly prevent him from running for president again in 2024.

This will trigger a trial in the Senate and a two-thirds majority would have to vote against Trump in order to remove him and convict him of the charge. That means around 17 Republican Senators would need to turn on Trump for it to be successful.

President-elect Biden to outline fiscal stimulus plans

President-elect Joe Biden will make a speech later today to outline plans for a huge fiscal stimulus bill to help the US economy recover from the pandemic.

Reports suggest the new fiscal stimulus could be worth anywhere between $1.3 trillion to $2 trillion and include direct payments of up to $2000 to hard-hit citizens. Having now won control of Congress following the Georgia run-off races, Biden is expected to push ahead with a sweep of Democrat policies.

A $900 billion package was recently agreed by Democrats and Republicans, but Biden has described this as a down payment ahead of his inauguration. That included direct payments of $600 to citizens after Democrats were unsuccessful in their attempts to raise the figure.

Forex: Dollar in focus ahead of Biden and Powell

The dollar is in focus today ahead of Biden’s speech and the update from the Fed chair Jerome Powell.

GBP/USD traded at 1.36354 in early trade, flat from 1.36376 at the close of trade yesterday.

EUR/USD was also broadly flat this morning at 1.21510 from 1.21578.

City Index analyst Tony Sycamore has a technical look at EUR/USD following recent updates from central banks.

Meanwhile, Joe Perry has a look at US dollar pairs and how they could react ahead of today’s speeches from Biden and Powell.

EUR/GBP traded at 0.89113 this morning – its lowest level since November 26 - from 0.89149 at the end of play on Wednesday.

Start trading the opportunities in the forex market today.

Commodities: Oil takes a breather from recent rally

Oil prices continue to take a breather following the recent rally. Production cuts by Saudi Arabia, bigger drawdowns in inventories in the likes of the US and China, and buoyant price forecasts from major US banks have all been providing support to prices over the last week or so. That pushed prices to an 11-month high, but prices fell yesterday and look set to fall further today as coronavirus fears come back into play.

Brent traded at $55.95 this morning from $56.00 a barrel at yesterday’s close, while WTI had edged a smidgen higher to $52.93 from $52.90.

The EIA natural gas storage change for the week to January 8 will be published at 1700 GMT.

Start trading the volatility in oil prices today.

Gold traded at $1841 this morning after losing ground after closing at $1845 yesterday.

Start trading gold and other precious metals today.  

Market-moving events in the economic calendar

The economic calendar is quiet this morning before activity picks up this afternoon. There is Germany’s real GDP growth due at 0900 GMT and Ireland CPI numbers at 1100 GMT. The European Central Bank’s monetary policy meeting accounts will be released at 1230 GMT.

Attention then turns to the US, with continuing and initial jobless claims due at 1330 GMT. Jerome Powell, the chair of the Federal Reserve, will make a speech at 1730 GMT.

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.