European Market Open: UK hopes to start unwinding lockdown in March

• The UK has expanded its vaccination programme today, as ministers hope to start unwinding national lockdown rules in the spring.
• Over the Channel, Germany’s CDU party picks their replacement for Merkel, while France calls for a moratorium on the trade spat between the EU and the US.
• China’s economy grew at a faster pace in the fourth quarter of 2020 than expected.
• US markets are shut today for Martin Luther King’s birthday

FTSE 100 to open higher

The FTSE 100 is set to open 0.3% higher this morning at 6723.3 from 6705.0 at the end of play on Friday.

European markets holding steady

The Euro STOXX Index is called to open 0.1% higher at 3585.5 this morning after ending last week at 3581.5.

France’s CAC 40 is called to open broadly flat at 5594.9 from 5596.8 at the close on Friday.

Germany’s DAX is set to open a smidgen higher at 13747.0 from 13736.8 at the last close.

Start trading the opportunities with indices today.

UK hopes to start unwinding national lockdown by March

Foreign secretary Dominic Raab said the country would be able to gradually start relaxing lockdown restrictions ‘by early spring, hopefully by March’ but warned they would not be removed ‘all in one big bang’. The UK intends to move out of the national lockdown and back into the tiered system that tries to contain outbreaks at a local level.

That comes as the UK starts to offer vaccines to people over the age of 70 and those classified as clinically extremely vulnerable as of Monday. That will see over five million people from priority groups three and four invited to get a jab. It occurs at the same time as 10 new vaccination hubs open across the country.

Over 3.8 million people have now received their first jab and prime minister Boris Johnson said the programme was now running ‘at a rate of 140 jabs a minute’. The country is trying to vaccinate the most vulnerable 15 million people by the middle of February.

The UK has also closed all its travel corridors today, meaning all travellers coming into the country will have to show they have had a negative test within 72-hours of travelling and quarantine for up to 10 days.

Global airline industry needs another $80 billion to survive

The global airline industry needs another $70 billion to $80 billion of government support to survive the ongoing crisis being caused by the coronavirus pandemic, according to the industry trade body.

The International Air Transport Association (IATA) said that would help bridge the gap until June, when it is hoping a proper recovery can begin as more people are vaccinated. However, the staggering sums would be on top of the already eye-watering $170 billion of support the industry has already received during the pandemic.

Travel has been one of the worst-hit industries over the past year. Just 1.8 billion passengers flew in 2020 compared to 4.5 billion in 2019, plunging airlines into the red and causing some to go bankrupt.

Germany’s CDU votes for Laschet to lead party

Germany’s Christian Democrats have voted for Armin Laschet to takeover as leader of the party over the weekend. It puts him in pole position to replace chancellor Angela Merkel in the Bundestag elections this September.

Laschet is the premier of North Rhine-Westphalia, the most populous state in the country, and regarded as the continuity candidate that is set to continue with Merkel’s style of politics.

Still, the close vote – at 521 votes to 466 in his runoff race with conservative candidate Friedrich Merz – shows the party is not united on the appointment of Laschet.

France wants moratorium on EU-US trade dispute

France’s foreign minister Jean-Yves Le Drian said the trade dispute between the European Union and the US should be put on hold until a solution can be found with incoming US president Joe Biden.

A long-running dispute between the US and the EU has escalated in recent months. Having originally started out as a disagreement over how airplane makers Airbus and Boeing are subsidised, the spat has now seen new tariffs be imposed on other products like steel and wine and engulfed a separate argument over European countries targeting Big Tech in the US with a digital services tax.

He said it could ‘take time’ to resolve, but said ‘we can always order a moratorium’ in the meantime.

China’s economy expands faster than expected

China’s GDP grew by 6.5% in the fourth quarter of 2020, beating market expectations. That was up from 6% the year before and means the Chinese economy grew 2.3% over 2020 as a whole.

Like virtually every other country, China’s economy took a battering in the first half of 2020 as the pandemic took hold, but it has managed to quickly recover in the latter half of the year unlike most other major economies.

Industrial production has been the main driver, up 7.1% in the final three months of the year, but retail sales also grew by 4.6%.

Forex: Narrow movements

GBP/USD traded at 1.35677 in early trade, up 0.2% from 1.35900 at the end of play on Friday.

EUR/USD was broadly flat at 1.20809 this morning from 1.20760 at the end of last week.

Meanwhile, EUR/GBP traded 0.2% higher at 0.89043 compared to 0.88877 as last week came to a close.

Start trading the opportunities in the forex market today.

Commodities: Gold rises after weekend wobble

Brent traded at $54.89 this morning, flat from $54.87 a barrel at the close on Friday, while WTI sat at $52.27 compared to $52.18.

Start trading the volatility in oil prices today.

Gold traded at $1838 in early trade, up 0.7% from $1825 at the end of last week.

City Index analyst Tony Sycamore has a technical look at the gold price after a $20 plunge in the price of gold in less than a minute over the weekend.

Start trading gold and other precious metals today.  

Market-moving events in the economic calendar

It is a light start for the economic calendar this week with US markets shut for Martin Luther King’s birthday. Italy will release CPI numbers at 0900 GMT and the latest Eurogroup meeting will be held today. Later, there is New Zealand’s NZIER business confidence survey at 2100 GMT.

City Index analyst Joe Perry has a look at the Week Ahead, which will see Joe Biden inaugurated as president and the BoC, BoJ and ECB all meet.

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.