Good morning,
Today is the day we finally see what the roadmap out of lockdown will look like for England. With much of this already spun out to the media, it has been indicated that we will see restrictions eased step by step over a period of at least 4 intervals between March and July. We know schools will be the first to reopen, with 8th March being the start date for that. Once this has been rolled out smoothly, socially distanced outdoor recreation will likely follow, with non-essential shops, pubs, restaurants and cafes will follow after that.
Cabinet is expected to meet this morning to sign off the final version before the Prime Minister delivers a statement to commons at 3:30pm this afternoon. Following this, he will lead a downing street briefing at 7pm.
An upbeat announcement has been pre-empted by news over the weekend that vaccines will have been offered to all adults in the UK by the end of July. This means all 45 million people in this group will have been invited to receive their first dose two months earlier than previously promised.
The date for all over 50s to receive their first jab has been brought forward from May to April 15th. This demographic consisting of 32m people and accounting for 98% of covid 19 deaths will have received some protection by the end of April. The R rate is at its lowest level since last May, currently sitting between 0.6 and 0.9, according to the ONS.
The Pfizer and Biotech vaccine has been working very well in Israel too, which has given more vaccines per capita than any other country. According to a draft study, the vaccine is 89.4% effective at preventing laboratory confirmed infections, providing a strong indication that immunisation will slow the transmission of the coronavirus, including asymptomatic carriers.
Over in the US, markets will be watching closely as the next stimulus package heads to a House vote this week. The proposal coming in just north of $1.9t and is expected to centre around infrastructure spending. There is a soft deadline of March 7th for passing this bill, as a move after this point would see the expiration of some expanded unemployment benefits.
Jerome Powell testifies before congress on Tuesday and Wednesday this week. He has been extremely dovish in recent times and with treasury yields continuing to climb, it is likely he will need to double down on this rhetoric. 10-year treasury yields climbed to 1.34% on Friday to the highest levels in a year which continues to prompt concern that rising inflation and borrowing costs could derail the economic recovery.
The pound traded above 1.4000 against the dollar last week for the first time since April 2018. Being supported by a vaccine rollout which continues to outperform as well as the Bank of England taking negative rates off the table for now, sterling is the strongest performing G10 currency year to date, playing catch up after lagging in the second half of 2020. Bank of England economist Andy Haldane, who dubbed the UK economy as a ‘coiled spring’ speaks on Wednesday, with Andrew Bailey also due to testify before parliament this week.
It is a light week on the data front with most interest expected to come from politicians and central bankers. UK unemployment numbers are out tomorrow, otherwise markets are likely to be driven by general risk sentiment and month end flows.
Have a good week.
This Morning Report was brought to by Dan Quigley
